If a Proposer and a Responder are asked to split $100 in the ultimatum bargaining game, standard economic theory would predict that the Proposer should offer the Responder:
A. the smallest dollar amount possible.
B. exactly $25.
C. exactly $50.
D. the largest dollar amount possible.
Answer: A
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The facts show that the political business cycle theory
A) does a good job of explaining monetary policy during presidential election years. B) is unable to explain monetary policy during presidential election years. C) doesn't generally support the political business cycle theory. D) explains monetary policy best during years in which the President is running for reelection.
Suppose that the economy is currently at full employment. All other things being equal, if the government implements expansionary fiscal policy, then the appropriate monetary policy is
A. no change from the current policy. B. reduce the growth of the money supply. C. constant growth of the money supply. D. increase the growth of the money supply.
Capitalism
What will be an ideal response?
Which of the following is NOT a characteristic of a centrally planned economy?
A. Consumers vote with their dollars thus guiding resources to produce what the society wants. B. Government sets the prices. C. The government decides how much of each good should be produced. D. All of these statements are characteristics of centrally planned economy.