To increase gas mileage, automobile manufacturers make cars small and light. Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage
These facts suggest that a positive relationship exists between safety and gas mileage.
Indicate whether the statement is true or false
FALSE
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One major characteristic of the price system is that
A) consumers together are the ones who ultimately decide what is produced. B) individual sellers ultimately decide what is produced in the market. C) competition among sellers is reduced. D) all exchanges are regulated by the government.
In general, pollution exists in situations in which
A) people are selfish. B) people refuse to take social responsibility seriously. C) there are poorly defined private property rights. D) there exists public property.
Brandon, an economist, is a believer of the rational expectations school. According to him, which of the following is likely to affect the levels of output and employment in an economy?
a. An expansionary monetary policy, if it is fully anticipated b. A recessionary monetary policy, if it is fully anticipated c. A monetary policy that is unanticipated d. A fiscal policy that is anticipated e. The Fed's announcement of no change in monetary policy
John Maynard Keynes believed that wages may be inflexible in the downward direction. Consequently, an economy
A) could get stuck in long-run equilibrium. B) could get stuck in a recessionary gap. C) could get stuck in an inflationary gap. D) would always produce more than Natural Real GDP. E) b and c