Suppose inflation comes in the form of an across-the board increase in all prices by some percentage k. For a consumer with exogenous income operating in a 2-good world, this will cause the budget constraint to
A. rotate inward
B. rotate outward
C. shift out in a parallel way
D. shift inward in a parallel way
E. none of the above
Answer: D
Economics
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A. 80,000 B. 50,000 C. 20,000 D. 60,000
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Economics