A theory of aggregate economic fluctuations called real business cycle theory holds that
A) changes in the real money supply are the only demand shocks that affect the natural rate of output.
B) aggregate demand shocks do affect the natural rate of output.
C) aggregate supply shocks do affect the natural rate of output.
D) changes in net exports are the only demand shocks that affect the natural rate of output.
C
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Use the following graph for a competitive market to answer the question below.
For a price floor to be effective and alter the market situation, it must be set
A. at $15. B. below $15. C. at $10. D. above $15.
In a market with positive externalities, the market equilibrium quantity will be less than the efficient equilibrium quantity
Indicate whether the statement is true or false
Which of the following statements about the supply of dollars in the foreign exchange market is true?
A) It is equal to the money supply. B) It represents the demand for U.S. goods and financial assets by firms and households outside the United States. C) It represents the supply of U.S. goods and financial assets by firms and households within the United States. D) It is determined by the willingness of households and firms that own dollars to exchange them for foreign currency.
Suppose a paper mill emits noxious odors that represent a negative externality for people living near the plant
If the plant managers ignore these external effects on their neighbors, what is the efficiency character of the resulting market outcome? A) The plant generates too much paper due to incomplete information. B) The plant generates too much paper because the odors are nonexclusive. C) The plant generates too much paper because the managers ignore the external costs of the air pollution on the neighbors. D) The market outcome is efficient.