The real business cycle theory is most closely related to
a. Keynesian theory.
b. monetarist theory.
c. the classical model.
d. the new Keynesian model.
C
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Maurice Allais, Reinhard Selten, and Vernon Smith all were awarded the Nobel Prize in Economics in part because
A) they proved that external economies would lead to market failure. B) of their work on the substitution and income effects of price changes. C) of their work with experimental economics. D) they discovered the first example of a Giffen good.
If Best Office Supply states that it will meet any competitor's price on a 500 pack of copy paper and beat it by 10 percent, this is an example of ________.
A) a barrier to entry B) a meet-the-competition clause C) price leadership D) a preannouncement
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Goods that are not rival in consumption, but are excludable are:
A. a common resource. B. an artificially scarce good. C. a public good. D. a private good.