In the long-run ISLM model and with everything else held constant, the long-run effect of an autonomous increase in investment is to ________ real output and ________ the interest rate

The self-correcting property of the economy means that output gaps are eventually eliminated by:

A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.

Assume that an economy has 2000 workers, each working 4000 hours per year. If the average real output per worker-hour is $10, then total output or real GDP will be:

A. $20 million. B. $100 million. C. $80 million. D. $40 million.