During an economic downturn, Keynes argued that firms would have ________ to increase spending because ________.
A. no incentive; interest rates would be too high.
B. no incentive; they already had enough capacity to meet demand.
C. a strong incentive; interest rates would be too high.
D. a strong incentive; they wouldn't have enough capacity to meet demand.
Answer: B
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Refer to the above table. The equilibrium price of tablets is
A) $500. B) $550. C) $650. D) $700.
In which of the following situations would supply be the most elastic?
a. An auto parts manufacturer is operating at capacity. b. A real estate developer in Boston is looking to build condos on the waterfront. c. A furniture manufacturer is operating its factory 8 hours per day. d. A hotel has all of its rooms booked for each night of the next 3 months.
If the nominal interest rate is 8 percent and the real interest rate is 3 percent, then the inflation rate equals:
A. 5 percent. B. 8 percent. C. 11 percent. D. 3 percent.
An economic hypothesis:
A. has the same meaning as an economic principle or economic law. B. is usually a normative statement. C. is a possible explanation of cause and effect. D. is a stronger generalization than an economic law.