In an Open Economy, in the Long Run, Permanent Shocks

question 101

Multiple Choice

In an open economy, in the long run, permanent shocks to GDP:

• A) are always contentious during an election year.
• B) are rare, but cannot be ignored.
• C) must be dealt with by permanent changes in consumption.
• D) indicate that taxes need to be raised.

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Definitions:

Excitatory

Pertaining to or causing excitation, often used in the context of neurotransmitters that increase the likelihood of a neuron firing an action potential.

Action Potential

A rapid rise and subsequent fall in voltage or membrane potential across a cellular membrane, a process essential for nerve impulse transmission.

Electrical Voltage

The difference in electric potential between two points, which drives the flow of electric current in a circuit.

Neurogenesis

The process of generating new neurons in the brain.