Define what is meant by the period known as the short run
What will be an ideal response?
The short run is the period during which firms face limits imposed by some fixed factor of production and firms cannot enter or exit an industry.
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In the money market, in the short run if the quantity of money exceeds the quantity of money demanded, then to achieve equilibrium the
A) inflation rate increases. B) supply of money increases. C) demand for money increases. D) nominal interest rate falls. E) price level rises.
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model? a. The reserves account becomes more positive (or less negative) and monetary base
falls. b. The reserves account becomes more negative (or less positive) and monetary base rises. c. The reserves account and monetary base remain the same. d. The reserves account becomes more negative (or less positive) and monetary base remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.