Classical economists would cite all of the following as reasons why the government cannot smooth out the business cycle except that
A. political constraints on policy actions prevent the government from carrying out effective policies.
B. time lags between the onset of a recession and the implementation of effective countermeasures make anti-recessionary macroeconomic policies impractical.
C. the government has imperfect knowledge of the economy.
D. only productivity shocks can cause real fluctuations in the business cycle.
Answer: D
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If average labor productivity decreases while population and the number of employed workers remain constant, then total output:
A. increases. B. decreases. C. may increase or decrease. D. remains constant.
The idea that unequal incomes are unfair generally uses the ________ principle of fairness
A) big tradeoff B) involuntary exchange C) voluntary exchange D) it's not fair if the result isn't fair E) it's not fair if the rules aren't fair
Using Figure 1 below, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y3.
D. P2 and Y2.
Which of the following is true?
A. Perfect equilibrium and Nash equilibrium are the same concept but with different names. B. A Nash equilibrium is always perfect. C. A Nash equilibrium is always perfect in a multistage game. D. A perfect equilibrium is always Nash.