The field of economics that analyzes government decision making, politics, and elections is called:
A. public finance.
B. public choice theory.
C. collective economics.
D. political economy.
Answer: B
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Because of the lag of the effects of changes in monetary policy and the failure of forecasters to anticipate supply-side shocks as well as changes in money demand or velocity, activist policy changes have tended at times during the mid-1970s to
A) accelerate inflation during expansions. B) increase unemployment during recessions. C) accelerate inflation and increased unemployment. D) dampen inflation and decrease unemployment.
____ mean that the costs involved cannot be recouped for a considerable period of time.
A. Sunk costs B. Opportunity costs C. Overheads D. Restructuring costs
When firms are said to be price takers, it implies that if a firm raises its price,
a. buyers will go elsewhere. b. buyers will pay the higher price in the short run. c. competitors will also raise their prices. d. firms in the industry will exercise market power.
A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?
a. both the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second