Modern Keynesians believe the government should use a policy of laissez faire to address a recession.
Answer the following statement true (T) or false (F)
False
Modern Keynesians believe the government should manage AD through both fiscal and monetary policy.
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Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. B) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. C) producers should lower the price to $1 in order to sell the quantity demanded of 10,000. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
Consumers value the product-specific services for a new smartphone at $30 and the marginal cost to the retailers for providing the product-specific services is $40. If the retailers provide the product-specific services, which of the following is true?
A) The shift in the market demand will be exactly double the shift in the market supply. B) The shift in the market demand will equal the shift in the market supply. C) The shift in the market demand will exceed the shift in the market supply. D) The shift in the market supply will exceed the shift in the market demand.
In the aftermath of the last financial crisis, critics of monetary policy argued that it was ineffective. The Federal Reserve had moved interest rates to historic lows without a significant stimulus effect. Some economists wondered if the United States was:
a) undergoing simultaneous increases in aggregate demand and supply. b) undergoing offsetting changes in aggregate demand and supply. c) facing hyperinflation. d) in a liquidity trap.
A change in the money wage rate shifts
What will be an ideal response?