Mainstream macroeconomics has embraced the:
A. rational expectations view that stabilization policy is totally ineffective.
B. monetarist view that the Fed should increase the money supply at a fixed annual rate.
C. rational expectations view that expectations can shift the aggregate demand and
aggregate supply curves.
D. monetarist view that an increase in government spending crowds out an equal amount of
investment spending.
C. rational expectations view that expectations can shift the aggregate demand and
aggregate supply curves.
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Refer to Figure 6-2. The absolute value of the price elasticity of demand at points a and b is 1. What is the value of Pb?
A) $50 B) $40 C) $30 D) $20
Which of the following contributed to a slowdown in U.S. labor productivity during the 1970s?
a. An increase in the number of skilled legal immigrant workers b. An increase in the illegal employment of minors c. An increase in the number of skilled illegal immigrant workers d. The exit of the baby boom generation from the work force e. Lower energy prices
Assume, for Vietnam, that the domestic price of textiles without international trade is lower than the world price of textiles. This suggests that, in the production of textiles,
a. Vietnam has a comparative advantage over other countries and Vietnam will import textiles. b. Vietnam has a comparative advantage over other countries and Vietnam will export textiles. c. other countries have a comparative advantage over Vietnam and Vietnam will import textiles. d. other countries have a comparative advantage over Vietnam and Vietnam will export textiles.
Patent and copyright laws encourage
a. creative activity. b. research and development. c. competition among firms. d. Both a and b are correct.