There is greater support for active policymaking when
A. price flexibility is common.
B. pure competition is common.
C. wage flexibility is common.
D. none of these.
Answer: D
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The unbalanced development strategy is preferred by many economists because
a. it relies on the vast resources of government rather than on the unreliable promises of private investment b. it creates a dynamic chain reaction of economic development c. it promotes economic dualism d. it overcomes the obstacles created by forward and backward linkages e. it favors demand-induced investments over supply-induced investments
Expansionary fiscal policy can cause a rise in real GDP in combination with
a. an increase in the price level. b. a decrease in the price level. c. no change in the price level. d. a decrease in the price level if the aggregate supply curve is upward sloping.
Refer to the accompanying figure. If the price is $4 today and there is no change in either supply or demand, one would expect the price in the future to be:
A. less than $4. B. greater than $4. C. greater than $6. D. $4.
Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), how many lemons (low quality) will be supplied by sellers?
A. 10 B. 15 C. 20 D. 25