All other things being equal, in the absence of public policy, an economy producing more than its sustainable capacity will eventually
a) reduce its long run capacity by wearing out its capital and depleting its natural resources
b) increase its long run capacity to meet the demand
c) experience wage and price increases and cutbacks in supply until output is at capacity
d) export the excess output to other countries
e) exhibit improved technology
c) experience wage and price increases and cutbacks in supply until output is at capacity
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Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
A) U.S. imports of goods and services. B) U.S. exports of goods and services. C) U.S. consumption goods and services. D) foreign capital goods. E) U.S. government goods and services.
Along an IS curve as income levels __________, saving is smaller, so the interest rate must be __________ to reduce the level of investment so it will be equal to saving
A) increase; higher B) increase; lower C) decrease; higher D) decrease; lower