Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.

If you invest in a foreign company by buying 8 percent of its shares of stock, you have engaged in

A) moral hazard. B) foreign direct investment. C) portfolio investment. D) adverse selection.

When laws and regulations prohibit firms from selling at "prices less than cost,"

A) consumers benefit. B) they are rarely enforced; therefore, competition is allowed to decline in the retailing industry. C) they help maintain competition by eliminating one important advantage of large firms. D) they must define "cost" arbitrarily since no firm has an incentive to sell below cost. E) they serve as our most effective defense against predatory pricing.