Which of the following statements applies to the classical system?
a. There is money wage inflexibility since full employment already existed
b. A perfectly flexible money wage is not always a requirement for full employment
c. Full employment was easily explained with downward money wage rigidity
d. An imperfect market structure is requirement for full employment
e. none of the above
E
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A contract between a bee keeper and an orchard farmer usually break because of the high cost of writing the contract
Indicate whether the statement is true or false
Which of the following statements best describes countercyclical policy?
a. Countercyclical policy says that when the economy has slowed down, it is time to keep taxes high and restrain spending. b. Countercyclical policy says that when the economy has slowed down, it is time for the government to go on a spree: raising spending and cutting taxes. c. Countercyclical policy says that regardless of economic conditions, it is time for the government to go on a spree: raising spending and cutting taxes. d. Countercyclical policy says that regardless of economic conditions, government should keep taxes high and restrain spending.
The definition of a normal good suggests that the
A. income elasticity of demand for the good is greater than 0. B. income elasticity of demand for the good is negative. C. price elasticity of demand for the good is negative. D. cross-price elasticity of demand for the good is positive.
In a laissez-faire economy, ________ what gets produced, how it is produced, and who gets it.
A. firms but not consumers determine B. the central government authority determines C. consumers but not firms determine D. the behavior of buyers and sellers determines