To support the argument for an active role for government in stabilizing the economy, it must be true that
A) consumers are not rational and that not all wages and prices are flexible.
B) not all wages and prices are flexible and that government must be able to react quickly enough.
C) government must be able to react quickly enough and that shocks to the economy be primarily due to aggregate supply shocks.
D) shocks to the economy be primarily due to aggregate supply shocks and that consumers are not rational.
B
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Mixed bundling may result in
A) less revenue compared to pure bundling. B) secondary market transactions between sellers in different markets. C) predatory pricing. D) greater revenue compared to pure bundling.
Income is considered to be a
A. nontaxable stream of funds. B. stock. C. flow. D. resource.
The marginal cost curve of a firm above AVC is also its short-run supply curve.
Answer the following statement true (T) or false (F)