Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?
A) Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen.
B) Workers could discover movements in the aggregate price level fairly easily.
C) The model relied on a non-market-clearing explanation of the labor market.
D) Workers would predict higher prices if policies that led to higher prices in the past were used again.
C
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Suppose a coupon bond with a par value of $1000 is currently priced at $950 and has a coupon of $40. Which of the following is true?
A) current yield > coupon rate B) current yield < coupon rate C) coupon rate has risen D) coupon rate has declined
If Japan could produce more steel in a year than the United States using the same amount of resources, then
a. Japan must have an absolute advantage in producing steel b. the United States must have a comparative advantage in producing steel c. Japan must have a comparative advantage in producing steel d. neither the United States nor Japan will have a comparative advantage in producing steel e. there would be no gains from specialization
If we are going to get the most value from our resources, entrepreneurs should choose the investment alternatives that
A) reduce the value of resources and retard wealth accumulation. B) result in the production of the largest possible output regardless of value to consumers. C) are most heavily subsidized by the government. D) yield a profitable rate of return.
Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price. Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect
A. one of the firms to select a high price and the other a low price. B. one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period. C. both to select high prices. D. both to select low prices.