One of the strongest arguments against active stabilization policy is
A. that recognition lags make timely intervention very difficult.
B. the economy corrects itself very slowly.
C. the inability of economic theory to suggest appropriate policy.
D. the difficulty of obtaining agreement on monetary policy.
Answer: A
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Grapes can be used to produce wine or raisins. Which graph in Figure 4-6 best depicts the effects on the U.S. raisin market of a decline in purchases of domestic wine?
A. 1 B. 2 C. 3 D. 4
Acme is a perfectly competitive firm. It has the total cost schedule given in the above table. Acme's product sells for $8.00 per unit. What amount of output is the most profitable and what is Acme's economic profit or economic loss?
What will be an ideal response?
If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?
a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.
In an open economy under flexible exchange rates and represented by the IS-LM-IP model, a reduction in government spending will cause a reduction in which of the following?
A) net exports B) the exchange rate, E C) exports D) all of the above E) none of the above