Which of the following statements about the classical model of the economy is FALSE?
A) Individuals pursue the public interest, not their own self-interest.
B) The economy will always move toward, or be at, full employment.
C) Savings and investment will always be equal.
D) Wages and prices are flexible.
A
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Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the price consumers pay for food
A) does not change, that is, it remains constant. B) falls. C) rises. D) might rise or fall depending on whether the demand for food is elastic or inelastic. E) might rise or fall depending on whether the monopoly's marginal revenue curve lies above or below its demand curve.
The aggregate money demand depends on
A) the interest rate. B) the price level. C) real national income. D) the interest rate, price level, and real national income. E) the price level and the liquidity of the asset.
If featherbedding raises the price of output produced by the union workers, it
a. increases employment at the firm and in the industry b. decreases employment at the firm and in the industry c. increases employment at the firm but may decrease it in the industry d. decreases employment at the firm and increases it in the industry e. increases employment at the firm but reduces the number of firms so that there is no net effect on industry employment
A government regulation making it very difficult to fire workers will have what effect in the labor market?
a. Demand for workers will decrease. b. The number of people hired will increase. c. There will be no effect on the labor market. d. Companies will fire more people.