When Classical economists of the 1930s looked at the Great Depression, they:
A. thought it was a result of prices adjusting too quickly.
B. suggested wages were too flexible.
C. blamed it on activist fiscal and monetary policies.
D. lacked a good explanation of why it was happening.
Answer: D
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The growth rate of real GDP per person equals the
A) population growth rate plus the growth rate of real GDP. B) change in the economic growth rate divided by the change in the population growth rate. C) the economic growth rate per person divided by the change in the population growth rate. D) growth rate of real GDP minus the growth rate of the population. E) population growth rate plus the growth rate of real GDP then divided by the initial level of real GDP.
Whether or not production is accompanied by an externality, a social planner who aims to maximize social surplus will always produce (assuming he does produce) where marginal social cost is equal to marginal social benefit.
Answer the following statement true (T) or false (F)
An example of the problem of ________ is when a corporation uses the funds raised from selling bonds to fund corporate expansion to pay for Caribbean cruises for all of its employees and their families
A) adverse selection B) moral hazard C) risk sharing D) credit risk
In the loanable funds framework, the ________ curve of bonds is equivalent to the ________ curve of loanable funds
A) demand; demand B) demand; supply C) supply; supply D) supply; equilibrium