The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression.
B) the presence of both high unemployment and high inflation during the 1970s.
C) the theoretical proof that classical ideas were invalid.
D) the evidence that classical ideas were useful during economic booms, but not during economic recessions.
A
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A profit-maximizing firm should employ a resource up to the point that:
a. marginal revenue product is zero. b. marginal revenue product equals marginal resource cost. c. marginal revenue product is maximized. d. marginal revenue equals marginal cost.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
Which of the following characteristics of the monopolistically competitive and the perfectly competitive market will cause the firm to earn zero profits in the long run?
A. no barriers to entry B. many buyers C. price taker D. homogeneous product
The Federal Reserve is responsible for monetary policy in the United States.
Answer the following statement true (T) or false (F)