During the period of the 1930s,
A. wages and prices adjusted quickly to changing economic conditions.
B. the classical view of the macroeconomy was validated by prevailing economic conditions.
C. wages adjusted quickly as expected by Say's law but other prices, especially agricultural prices, did not.
D. the sluggish adjustment of the economy caused economists to look at alternatives to the classical model.
D. the sluggish adjustment of the economy caused economists to look at alternatives to the classical model.
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The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. What policy could government adopt to prevent entry deterrence by the incumbent?
A) production quotas B) price ceiling C) safety standards D) None of the above is correct.
Which of the following actions can prevent migration of individuals from one health insurance policy to another?
a. Lowering the opportunity costs of switching from one policy to another. b. Fixing a uniform premium rate for all individuals under one type of policy. c. Conducting an interview of the people before placing them under different policies. d. Setting up a norm requiring all individuals to purchase the same coverage.
Which of the following is correct?
a. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy. b. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and a complex economy can achieve zero unemployment. c. The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and a complex economy can achieve zero unemployment. d. The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy.
The nominal interest rate in the U.S. is 5% and the nominal interest rate in Canada is 3%. The spot value of the U.S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar). Calculate the forward discount or premium for the dollar. Does the interest parity condition hold? If not explain what is likely to occur in foreign exchange markets. Assume that interest rates cannot
change. What will be an ideal response?