In the long-run equilibrium, an increase in the quantity of capital leads to
A) an increase in the equilibrium price level and an increase in equilibrium real GDP.
B) a decrease in the equilibrium price level and an increase in equilibrium real GDP.
C) a decrease in the equilibrium price level, but no change in equilibrium real GDP.
D) no change in the equilibrium price level, but an increase in equilibrium real GDP.
B
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A balance sheet
A) measures flows of income and expenditure over a given period of time. B) equates flows of revenue with flows of expenditure. C) measures assets, liabilities, and net worth at a giving instance in time. D) None of the above are correct.
An increase in the price level reduces net exports because
A) it leads indirectly to a higher exchange rate. B) it leads indirectly to a lower exchange rate. C) it leads indirectly to a lower real interest rate. D) it leads directly to higher real money balances.