The classical model makes little distinction between the long run and short run because
A. current changes influence the long run, so it is not possible to plan for the future.
B. wages and prices adjust so fast that the economy is quickly moving towards the long run.
C. the model has not been fully developed yet.
D. the classical economists knew that we are always operating in the short run.
Answer: B
You might also like to view...
Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 to its holder at the end of the first, second, and third years and pays $10,400 upon its maturity at the end of four years. The principal amount of this bond is ________, the coupon rate is ________, and the term of this bond is ________.
A. $10,000; 4%; four years B. $10,000; $400; 4% C. $400; 40%; four years D. $10,400; 4%; four years
Since 1996, _____
a. U.S. productivity growth has skyrocketed, at least initially, as more computers were installed b. the computer sector has grown faster than the U.S. economy as a whole c. spending on computers has been approximately constant as a fraction of total U.S. investment spending d. the contribution of computers to U.S. productivity growth has been negative e. computing technology has not improved enough to have a measurable impact on U.S. productivity
What economic argument suggests that if transactions costs are sufficiently low, the post-bargaining equilibrium is economically efficient regardless of how property rights are distributed?
a. the Coase theorem b. the laws of supply and demand c. the law of comparative advantage d. the law of externalities
Suppose that the dollar real exchange rate falls by 10% against the euro, 20% against the pound, and 25% against the yen. If the United States trades equally with each country, what is the percentage decline in the real effective exchange rate?
a. 22.5% b. 18.3% c. 15.1% d. 20.3%