Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the:
a. Long-term real GDP growth rate will rise.
b. Long-term real GDP growth rate will fall.
c. Long-term real GDP growth rate will remain unchanged.
d. Long-term inflation rate will fall.
e. The international value of the domestic currency will fall.
.C
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The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computer manuals after technological advances in making computers occur?
A) Graph A B) Graph B C) Graph C D) Graph D
Are markets always in equilibrium?
a. Yes, they are always at the equilibrium point, or very close to it. b. Yes, because few things tend to alter supply and demand. c. No, but if there is no interference, they tend to move toward equilibrium. d. No, they never "settle down" into a stable price and quantity. e. Uncertain, economic theory has no answer to this question.