The original Keynesian economic theory states that
A. many prices would not decline even when aggregate demand decreases.
B. the short-run aggregate supply (SRAS) curve is always vertical.
C. wages tend to fall more quickly than the overall price level.
D. the economy naturally self-regulates so as to reach full employment quickly.
Answer: A
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Do people's incomes result from the choices they make?
A) Yes, and from no constraints whatsoever. B) Yes, but from among a limited set of options. C) No, because obviously no one would choose to be poor. D) No, because others often will not let people have what they choose.
Which of the following make(s) demand for U.S. dollars in the market for foreign-currency exchange higher than otherwise?
a. a U.S. airline wanting to buy jets made in France and a Swedish hospital wanting to buy medical equipment made in the U.S. b. a U.S. airline wanting to buy jets made in France, but not a Swedish hospital wanting to buy medical equipment made in the U.S. c. a Swedish hospital wanting to buy medical equipment made in the U.S., but not a U.S. airline wanting to buy jets made in France d. neither a U.S. bank wanting to lend money to a Canadian company nor a U.S. firm wanting to buy computers made in South Korea
If banks operated under a 100 percent reserve system, commercial banks would not be able to create any further money
Indicate whether the statement is true or false
If a normal good has a price elasticity of demand equal to 4, then:
a. a 1 percent increase in its price will increase quantity demanded by 4 percent. b. a 1 percent increase in its price will decrease quantity demanded by 4 percent. c. a 1 percent increase in its price will increase quantity demanded by 0.25 percent. d. a 1 percent increase in its price will decrease quantity demanded by 0.25 percent.