Financial capital is highly volatile, and technological advances have reinforced this volatility
Indicate whether the statement is true or false
TRUE
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If the economy is already at its potential output, then the spending multiplier is: a. zero in the long run
b. infinite in the long run. c. equal to 1 in the long run. d. zero in the short run. e. equal to 1 in the short run.
In what geographic areas would the traditional economy most likely be found?
a. parts of Asia, Africa, and South America b. Cuba and North Korea c. Europe and the United States d. China and Russia
Monopolistic competition is an
a. inefficient market structure because there is deadweight loss. b. inefficient market structure because price exceeds marginal cost. c. efficient market structure because free entry drives long-run profits to zero. d. Both a and b are correct.
The ultimatum game reveals that
a. it does not make sense to try to maximize profits. b. people may have an innate sense of fairness that economic theory does not capture. c. offering someone a wildly unfair outcome is usually ok since people tend to make decisions using a "something is better than nothing" philosophy. d. Both a and b.