Prior to the Great Depression, classical economists believed that a recessionary downturn would be reversed by:
a. higher wages and prices.
b. lower wages and prices.
c. an expansionary monetary policy on the part of the Federal Reserve System.
d. an increase in government spending that would stimulate aggregate demand.
b
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April quit her job as an accountant at Ernst and Young, where she was paid $45,000 per year. She started her own landscaping business. She rents machines and tools for $50,000 and pays $10,000 as wages to her hel
A) Her accountant calculates her profit as $40,000. B) She has an economic loss. C) Her explicit cost is $105,000. D) Both answers A and B are correct. E) Both answers A and C are correct.
If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments
Indicate whether the statement is true or false
A merger between two firms that produce identical goods would be called
A) a horizontal merger. B) a vertical merger. C) a Lerner merger. D) a duopoly.
A perfectly competitive firm has a random marginal cost with a 30 percent chance of a high marginal cost of $50 and a 70 percent chance of a low marginal cost of $40. What is the firm's expected marginal cost?
A) $48 B) $46 C) $43 D) $45