Compare and contrast the arguments favoring active versus passive policy making
What will be an ideal response?
The models that stress wage and price flexibility and rationality on the part of economic agents tend to favor passive policy making. If people can anticipate policy actions and if wages and prices are flexible, the economy will tend toward long-run equilibrium. Discretionary policies conducted by governmental policy makers will not be effective means of influencing real Gross Domestic Product (GDP). In contrast, economists who conclude that small menu costs are important elements of real-world economies conclude that active policy making can influence real GDP and move the economy toward full employment.
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Which of the following is NOT an example of ways in which microeconomic analysis can help Toyota Motor Corporation its in corporate decision making?
A) Forecasting demand for new automobiles B) Determining how many automobiles to produce in order to maximize profits C) Predicting how competitors will react to the firm's pricing strategy D) Forecasting the effect of Toyota's hiring patterns on the U.S. unemployment rate E) Forecasting the effect of an oil price increase on demand for hybrid autos
A point lying beyond the utilities possibilities frontier is
A) unattainable. B) efficient. C) inefficient. D) profitable.
The coefficients of the VAR are estimated by
A) using a simultaneous estimation method such as TSLS. B) maximum likelihood. C) panel methods. D) estimating each of the equations by OLS.
A franchisee works than a salaried manager of company store because
a. Less, he doesn't get to keep the additional profits he generates b. Harder, he gets to keep the additional profits he generates c. Lesser, he is generally lazy d. Harder, he doesn't get to keep the additional profits he generates