Economists who believe that market economies are inherently unstable argue that the crisis of 2008 was primarily the result of
a. the expansionary policies of the Fed that caused the housing boom.
b. housing regulations that undermined sound lending practices.
c. the leveraged lending practices of banks and the fear that retarded both consumption and investment in the latter half of 2008.
d. persistently high interest rates during the decade leading up to the crisis.
C
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An optimal level of output is one at which marginal profit > 0.
Answer the following statement true (T) or false (F)
Discretionary fiscal policy works by shifting the short-run aggregate supply curve
a. True b. False Indicate whether the statement is true or false
Which of the following statements captures the meaning of transitivity of preferences?
a. If A is preferred to B, then B is less preferred than A. b. If A is preferred to B, and B is preferred to C, then A is preferred to C. c. If A is preferred to B and B is preferred to C, then the preference for A over B is stronger than the preference for B over C. d. If A is preferred to C, then there exists B such that A is preferred to B and C is preferred to A.
A natural monopoly can purposely increase its cost of production by
A. Using government subsidies to offset losses. B. Keeping marginal costs low. C. Using its own unregulated subsidiary to inflate its cost. D. Substituting cheaper inputs.