Demand for the product of an industry in perfect competition is assumed to be inelastic.
Answer the following statement true (T) or false (F)
False
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Labor force productivity has increased from $30 per hour to $32 per hour over the past year. This could result from
A) an increase in real GDP with no change in the aggregate hours or a decrease in aggregate hours with no change in real GDP. B) only an increase in real GDP. C) an increase in population. D) an increase in the labor force participation rate. E) only a decrease in aggregate hours.
In an oligopoly, the outcome is uncertain because price and output decisions depend on the response of rivals
a. True b. False Indicate whether the statement is true or false
Many people have heard that the stock market rises when a team from the National Football Conference (NFC) wins the Super Bowl, and falls when a team from the American Football Conference (AFC) is victorious. If you conclude that there is a causal relationship between the outcome of the Super Bowl and stock prices, you probably are: a. confusing correlation with causation
b. committing the fallacy of composition. c. confusing the direction of causality, since everyone knows that stock prices determine which team wins the Super Bowl. d. none of the above
Keynes argued that aggregate demand is
a. stable, because the economy tends to return to its long-run equilibrium quickly after any disturbance to aggregate demand. b. stable, because changes in consumption are mostly offset by changes in investment and vice versa. c. unstable, because waves of pessimism and optimism create fluctuations in aggregate demand. d. unstable, because of long and variable policy lags that worsen economic fluctuations.