Suppose the price level falls. Because of fixed nominal wage contracts, firms become less profitable and they cut back on production. This is a demonstration of the
A. classical dichotomy theory of the short-run aggregate-supply curve.
B. sticky-wage theory of the short-run aggregate-supply curve.
C. misperceptions theory of the short-run aggregate-supply curve.
D. sticky-price theory of the short-run aggregate-supply curve.
Answer: B. sticky-wage theory of the short-run aggregate-supply curve.
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Refer to the scenario above. Which of the following is true if Sarah is optimizing in levels?
A) An optimizer will rent the hotel for three days if the total benefit of staying for three days exceeds the total benefits of staying for two days. B) An optimizer will rent the hotel room for three days if the cost of staying for two days exceeds the cost of staying for three days. C) An optimizer will rent the hotel room for three days if the net benefit of staying for three days exceeds the net benefit of staying for two days. D) An optimizer will rent the hotel room for three days if the net benefit of staying for the third day is negative.
Which of the following is the last step in the model-building process?
a. Develop a model based on simplified assumptions. b. Collect data and test the model. c. Identify the problem. d. Formulate an assumption.
A U.S. purchase of oil from overseas paid for with foreign currency it already owned
a. increases U.S. net exports, and increases U.S. net capital outflow. b. increases U.S. net exports, and decreases U.S. net capital outflow. c. decreases U.S. net exports, and increases U.S. net capital outflow. d. decreases U.S. net exports, and decreases U.S. net capital outflow.
if usda estimates that expected corn-based ethanol production will increase, this is expected to:
a) increase estimated "use" of corn (in the current crop year) b) increase estimated "supply" of corn (in the current crop year)