Real business cycle theory explains variations in prices, employment, and real Gross Domestic Product (GDP) by focusing on
A. changes in real variables such as supply shocks, technological changes, and shifts in the composition of the labor force.
B. the effects of the Phillips curve.
C. anticipated monetary policies enacted by the Fed.
D. anticipated changes in fiscal policy enacted by the government.
Answer: A
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Market equilibrium occurs when
A) other things remain the same. B) the market is changing rapidly. C) the quantity demanded equals the quantity supplied. D) buyers get the lowest possible price. E) everyone who wants the good gets the quantity he or she wants.
Refer to Figure 11-13. The lines shown in the diagram are isocost lines. Which of the following shows a decrease in the price of capital while the price of labor remains unchanged?
A) the movement from BF to AF B) the movement from BF to BD C) the movement from AF to BF D) the movement from BF to CE
A "false positive" is
a. When you incorrectly conclude that your hypothesis is true b. When you incorrectly conclude that your hypothesis is false c. When you correctly conclude that your hypothesis is true d. When you correctly conclude that your hypothesis is false
Beginning from a long run equilibrium in a competitive industry, if there is a substantial, permanent increase in demand for industry output:
a. firms will enter the industry, the quantity produced will rise, and prices will end up lower than their initial long run equilibrium level. b. firms will enter the industry, the quantity produced will rise, and prices will end up higher than their initial long run equilibrium level. c. firms will enter the industry, the quantity produced will rise, and prices will end up at the same level as their initial long run equilibrium level. d. firms will enter the industry, the quantity produced will rise, and but without more information, we cannot know if prices will end up higher than their initial long run equilibrium level.