According to the Classical model, unemployment
A. could not persist because wages would fall to eliminate the excess supply of labor.
B. could be eliminated through fiscal and monetary policies.
C. could be eliminated only through government intervention.
D. could not persist because wages would rise to eliminate the excess supply of labor.
Answer: A
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Which of the following resources is not essential in the production of a typical cheese pizza?
A) Dough B) Sauce C) Heat D) Fodder for cows E) Trick question: all of the above are essential.
If the price elasticity of demand for a good is greater than one in absolute terms, we say that demand is
A) elastic. B) inelastic. C) perfect. D) vertical.
According to the mini-case on the Barbie Doll, Mattel is successful because
A) it has been selling Barbie dolls for a long time. B) the Barbie doll is the top import into the U.S. C) international trade allows them to produce a wide variety of doll types at many price points. D) there are low fixed costs for product design.
In the short run, a decrease in government purchases would
a. decrease real GDP because of the multiplier effect and price level changes, but be offset somewhat by decreases in the interest rate b. decrease real GDP because of the increases in the price level and increases in the interest rate c. decrease real GDP because of the multiplier effect and increase in the interest rate, but be offset somewhat by decreases in the price level d. decrease real GDP because of the multiplier effect, but be offset somewhat by decreases in the price level and the interest rate e. not change output because of the multiplier effect; price level and interest rate changes completely cancel each other out