If each of the parties to a contract controls a resource essential for the other's survival, opportunistic behavior by any of them will increase the value of the transaction
Indicate whether the statement is true or false
F
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Real business cycle theorists are critical of monetarist reduced-form evidence because they believe
A) money is the most important cause of changes in aggregate demand. B) there is reverse causation from the business cycle to money. C) there is reverse causation from money to the business cycle. D) business cycles do not exist.
The owner of an Oakley store has a more__________ demand curve and the owner of a chicken farm has a more__________ demand curve
a. inelastic; inelastic b. elastic; inelastic c. inelastic; elastic d. elastic; elastic
A meditation class meets on the second floor of a building; the first floor is a nightclub. The loud music from the club disturbs the classes. Which of the following best explains why the negative externality faced by the class arises?
a. The class has no property right to a quiet environment. b. The club has a property right on the ground floor. c. The class has a property right on the second floor. d. The club uses an inappropriate technology (i.e., no soundproofing). e. Both the club and class are profitable.
Why do symmetric shocks not disturb fixed exchange rate systems?
A) Symmetric shocks happen only once and cause a one-time shift in interest rates. B) Symmetric shocks imply differences in rates of interest, which is irrelevant to fixed exchange rate systems. C) A demand shock can easily be dealt with using domestic policies that do not involve other nations. D) Symmetric shocks require the same medicine in both economies, so monetary policy will be in a direction to help both situations.