Keynes believed in all of the following EXCEPT.
A. the expected rate of profit was more important than the interest rate.
B. recessions are temporary.
C. expansionary government spending and tax cuts are cures for recessions and depressions.
D. in the short run, aggregate demand should be manipulated to stabilize the economy.
B. recessions are temporary.
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The major cost of production in the economy is
A. interest expense. B. capital costs. C. rents. D. profits. E. wages.
Suppose the market-clearing wage for pizza delivery workers is $7.00 per hour, but a $10.00 per hour minimum wage is enacted. Other things constant, the higher minimum wage tends to
A) increase the supply of pizza delivery workers. B) decrease the quantity demanded of pizza delivery workers. C) create a shortage of pizza delivery workers. D) accomplish all of the above. E) accomplish none of the above.
If the best surgeon in town is also the best at cleaning swimming pools, then according to economic reasoning, this person should
A) split his time evenly between being a surgeon and cleaning swimming pools. B) pursue the activity he enjoys more. C) specialize in being a surgeon because its opportunity cost is lower. D) specialize in cleaning swimming pools because it is more labor-intensive.
The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. If firm A chooses its strategy first, then
A) firm A will not enter. B) firm B's entry is blockaded. C) both firms will enter. D) firm A will enter and firm B will not.