According to the real-business-cycle perspective
A. the Phillips curve is very important.
B. the economy cannot be stabilized by active policy actions.
C. passive policy making is important.
D. active policy making is important.
Answer: B
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Suppose the market for bottled water is served by two oligopolists. If they reach an agreement to restrict production and charge a price above marginal cost, then:
A. neither firm will have an incentive to cheat on the agreement since it benefits them both. B. they will earn a larger profit than a monopolist would have earned. C. they will charge a higher price than a monopolist would have charged. D. their agreement is likely to eventually collapse.
If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts upward to the left; shifts to the right B. shifts downward to the right; shifts to the left C. shifts downward to the right; shifts to the right D. shifts upward to the left; shifts to the left
If a monopolist can perfectly price discriminate, it will
A) charge the same price for each unit sold. B) produce until price elasticity of demand equals one. C) not be concerned with the market demand. D) charge a different price for every unit sold.
_______ ensure that resources are allocated to where they are most highly valued
a. Communist governments b. Consumers c. Suppliers d. Non-governmental organizations e. Markets