Classical economists argue that
A. the government should actively intervene in the economy to eliminate business cycles.
B. government policies will be ineffective and counterproductive.
C. wages and prices don't adjust quickly, so the economy is slow to return to equilibrium.
D. the government should have an active role in the economy.
Answer: B
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The appropriate monetary policy in the event of a recessionary gap would be to
A) raise the required reserve ratio. B) increase the difference between the federal funds rate and the required reserve ratio. C) engage in an open market purchase of U.S. government securities. D) increase the difference between the discount rate and the federal funds rate.
If a perfectly competitive industry is taken over by a monopolist, the market price will rise
a. due to improvements in technology b. assuming that technology is unchanged c. and output will rise d. unless barriers to entry are imposed e. until they equal marginal revenue
The economic expansion which began in 1933 was due to
A. the fact that business had hit bottom and was ready to rebound. B. The efforts of the Roosevelt Administration to stimulate the economy. C. Both the efforts of the Roosevelt Administration and the readiness of business to rebound. D. Neither the efforts of the Roosevelt Administration nor the readiness of business to rebound.
Refer to the information provided in Figure 33.2 below to answer the question(s) that follow.
Figure 33.2Refer to Figure 33.2. the U.S. has
A. no comparative advantage in producing either cars or trucks. B. a comparative advantage in producing trucks. C. an absolute advantage in producing trucks. D. a comparative advantage in producing cars.