Which of the following assumptions is crucial to the classical model but not the Keynesian model?
a. The real wage always equals the marginal product of labor.
b. Real wages are perfectly flexible.
c. nominal wages are perfectly flexible.
d. monetary policy primarily affects aggregate demand.
e. both b and c.
C
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Suppose that the market demand curve is 
and the market supply curve is 
.
a. Calculate the equilibrium price and output level.
b. Suppose a price floor of 16 is imposed in this market. What is the new equilibrium quantity transacted in the market?
c. How does the price that firms receive -- net any additional marginal effort costs they incur -- compare to the price consumers pay? d. What is the total cost of the additional effort firms have to exert in equilibrium? What will be an ideal response?
By 2015, how many European countries were members of the European Union?
A) 12 B) 17 C) 28 D) 57
When the rate of interest in the economy falls, there will be
A) an increase in the market price of existing bonds. B) a decrease in the transaction demand for money. C) less investment by businesses. D) an increase in nominal Gross Domestic Product (GDP).
Between 1775 and 1780, $242 million of Continental Notes were printed. As the quantity of the Continentals multiplied,
a. the demand for these notes multiplied as well b. their value depreciated c. their value appreciated d. banks on the European continent intervened to stabilize the value of the Continental notes e. silver and gold became less valuable