According to Keynesians, the primary reason money is not neutral is
A) rational expectations.
B) price stickiness.
C) reverse causation.
D) misperceptions over the aggregate price level.
B
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The long-run aggregate supply when resources are fully employed
A) has no relationship with the production possibilities curve. B) will always be associated with a point outside the production possibilities curve. C) will always be associated with a point on the production possibilities curve. D) is determined by demand.
The price elasticity of demand between rifles and bullets is likely to be:
a. negative, because the goods are complements. b. positive, because the goods are complements. c. negative, because the goods are substitutes. d. positive, because the goods are substitutes.
How does competition from nonunion firms and foreign producers affect the ability of a union to increase the wages of its members?
a. Such competition reduces the ability of a union to achieve wage increases. b. Such competition does not affect the ability of a union to achieve wage increases. c. Such competition will increase the strength of a union if it produces a product sold in the domestic market but reduce the strength of the union if it produces an export product. d. The effect of this type of competition will be entirely dependent on the elasticity of demand for labor in the domestic market.
Is the equation of exchange an economic model?
A. Yes, it is a simple but powerful model. B. No, economic models cannot be equations. C. No, it is merely an arithmetic statement. D. Yes, it is a cause-and-effect model.