According to New Keynesian economists
A. fluctuations in output are primarily caused by supply shocks.
B. the amount of time it takes firms to adjust prices is less than six months.
C. activist policy has little effect on real Gross Domestic Product (GDP).
D. activist policy can be used to minimize variations in real Gross Domestic Product (GDP).
Answer: D
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Governments are often forced to bail out large banks to prevent the entire economy from being affected adversely. This provision often encourages banks to invest in risky assets. This is an example of ________
A) moral hazard B) a positive externality C) adverse selection D) anchoring
If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:
a. the firm should try to produce less output. b. total fixed costs are constant along the LRAC curve. c. there are economies of scale. d. the firm is probably having significant management problems. e. when output is doubled, total costs are doubled.
The above table gives the demand and supply schedules for cat food. If the price is $1
00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?
The cross-price elasticity between baseballs and tennis balls is likely to be a large positive number
a. True b. False Indicate whether the statement is true or false