If the government reduced the minimum wage and pursued expansionary monetary policy, then in the long run
a. both the unemployment rate and the inflation rate would be higher.
b. both the unemployment rate and the inflation rate would be lower.
c. the unemployment rate would be higher and the inflation rate would be lower.
d. the unemployment rate would be lower and the inflation rate would be higher.
d
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The theory of the firm is based on the following two key assumptions:
a) Firms seek to maximize profits, and the firm is a single, consistent decision-making unit. b) Firms seek to become as large as possible, and they seek to maximize total revenue. c) Firms seek to maximize revenues, and to maximize undistributed profits. d) Each firm has a highly diversified product, and this leads to profit maximization. e) Firms seek to maximize profit, and to distribute the maximum value in dividends.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher