The most effective fiscal stimulus will
a. create jobs, even if the employment is on unproductive projects.
b. substantially change the composition of aggregate demand.
c. encourage interest groups to lobby more intensely and make larger political contributions.
d. direct the economy to full employment and direct resources toward economically productive projects.
D
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The long-run price elasticity of demand is usually larger than the short-run price elasticity of demand because:
a. demand curves tend to become steeper over time. b. economists take the absolute value of long-run price elasticities but not of short-run elasticities. c. people have more time to find substitute goods. d. incomes tend to rise over time. e. supply curves change over time.
When a single firm in an oligopoly market decides to increase output, that firm:
A. feels the quantity effect, but other firms feel the price effect. B. feels both the quantity effect and price effect, but other firms only feel the price effect. C. feels the price effect, but other firms feel the quantity effect. D. feels the price effect, but other firms feel both the price and quantity effects.