Which of the following is an important lesson that can be drawn from the experience of the Great Depression?
a. Frequent shifts in monetary policy can help smooth out unstable economic conditions during a recession.
b. Trade restrictions can "save jobs" and expand total employment during an economic downturn.
c. The good intentions of political decision-makers are no substitute for sound policy.
d. The federal government should always balance its budget during a recession.
C
You might also like to view...
Refer to Figure 13-14. It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why wouldn't a firm expand its output to Q1?
A) Demand is not sufficient for consumers to buy Q1. B) The firm wants to maximize accounting profit rather than economic profit. C) The firm would suffer an economic loss at Q1 while it would break even at Q0. D) The firm's marginal revenue would be negative at Q1.
Suppose Bev's Bags makes large handbags and small handbags. They sold 70,000 large bags for $45 each and 25,000 small bags for $15 each. What was the total revenue for this company?
A. $3,150,000 B. $375,000 C. $3,525,000 D. $2,850,000
People choose to hold a smaller quantity of money if
a. the interest rate increases, which causes the opportunity cost of holding money to increase. b. the interest rate increases, which causes the opportunity cost of holding money to decrease. c. the interest rate decreases, which causes the opportunity cost of holding money to increase. d. the interest rate decreases, which causes the opportunity cost of holding money to decrease.
______ is defined as the percentage change in the demand of one good (good A) divided by the percentage change in the price of another good (good B).
a. income elasticity of demand b. price elasticity of supply c. unit elasticity of demand d. cross-price elasticity of demand