Which of the following is an important insight of Keynesian analysis?
a. When an economy is in a recession, lower interest rates and lower wage rates will quickly direct the economy back to full employment.
b. When widespread unemployment is present, increases in aggregate demand will exert a larger impact on real output than when the economy is operating at or near full employment.
c. When an economy is in a recession, it makes sense to increase taxes and reduce government expenditures.
d. A balanced budget is the key to maintenance of full employment.
B
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Rank the following state and local government expenditure categories from largest to smallest
a. education, health, highways b. education, highways, income security c. highways, education, public order and safety d. public order and safety, highways, health
When a regulator is concerned about pleasing different groups in order to keep employed, this is known as the
A. regulatory hypothesis. B. share-the-gains, share-the-pains theory. C. capture hypothesis. D. creative theory.
Consider the following payoff matrix for a game in which two firms attempt to collude under the Bertrand model:
Firm B cuts Firm B colludes Firm A cuts 6,6 24,8 Firm A colludes 8,24 12,12 Here, the possible options are to retain the collusive price (collude) or to lower the price in attempt to increase the firm's market share (cut). The payoffs are stated in terms of millions of dollars of profits earned per year. What is the Nash equilibrium for this game? A) Both firms cut prices. B) Both firms collude. C) There are two Nash equilibria: A cuts and B colludes, and A colludes and B cuts. D) There are no Nash equilibria in this game.
The United Steelworkers is an example of a(n)
A) craft union. B) industrial union. C) public-sector union. D) guild.