The difference between the new classical theory and the new Keynesian theory is the assumption of
A) rational expectations.
B) adaptive expectations.
C) complete flexibility of wages and prices in the short run.
D) a and c
E) b and c
C
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If a one-year bond is purchased for $400 and the interest rate is 8 percent, what will it pay in one year?
A) $48 B) $368 C) $400 D) $432
When marginal cost is greater than average total cost, the
A) marginal cost decreases as output increases. B) marginal cost does not change as output increases. C) average total cost increases as output increases. D) average total cost decreases as output increases.
Which of the following provides the best explanation for diseconomies of scale?
A. Increased specialization B. Indivisible setup costs C. Diminishing marginal productivity D. Monitoring costs
The price of a new textbook increases from $105 to $130 while the price of used copies of the textbook increases from $45 to $55. Other things equal, we would expect to observe
A. the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. B. the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. C. the demand for the new textbook to increase while the demand for the used textbook to decrease. D. the quantity demanded of both to fall.