Suppose the Economy Is in Long-Run Equilibrium

question 19

Multiple Choice

Suppose the economy is in long-run equilibrium.Concerns about pollution cause the government to significantly restrict the production of electricity.At the same time,taxes fall.In the short-run

• A)real GDP will rise,and the price level might rise,fall,or stay the same.
• B)real GDP will fall,and the price level might rise,fall,or stay the same.
• C)the price level will rise,and real GDP might rise,fall,or stay the same.
• D)the price level will fall,and real GDP might rise,fall,or stay the same.

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Definitions:

Replications

Multiple instances or repeats of experiments or studies to verify findings or to increase precision.

Degrees of Freedom

The number of independent pieces of information upon which a statistical estimate is based minus the number of parameters being estimated.

Two-way ANOVA

A statistical method used to examine the effects of two different independent variables on one dependent variable.

Two-way Factor ANOVA

A statistical test used to determine the effect of two nominative variables on a continuous outcome.