In reality, decisions made by firms may not always produce maximum total profit because some executives
A. are more motivated by altruism.
B. are more interested in market share than profits.
C. may push research and development to the point that profits decline.
D. All of the responses are correct.
Answer: D
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A decrease in interest rates caused by a change in the price level would cause a(n) ________.
A. increase (or shift right) in aggregate demand B. decrease in the quantity of real output demanded (or movement up along AD) C. increase in the quantity of real output demanded (or movement down along AD) D. decrease (or shift left) in aggregate demand
According to classical macroeconomists, prices adjust ________ to shocks, so the government should ________
A) slowly; do little B) rapidly; do little C) rapidly; fight recessions D) slowly; fight recessions
If MRP > P, a firm should use less of that input
a. True b. False Indicate whether the statement is true or false
The monetarist-Keynesian debate on the importance of monetary policy is unresolved because monetarists and Keynesians focus on two different types of evidence that generate conflicting conclusions. Monetarists tend to focus on
A) structural-model evidence, while Keynesians focus on reduced-form evidence. B) reduced-form evidence, while Keynesians focus on structural-model evidence. C) reduced-form evidence, while Keynesians focus on direct-model evidence. D) structural-model evidence, while Keynesians focus on direct-model evidence.