Government can be used to solve externality problems that are too costly for private parties to solve
a. True
b. False
Indicate whether the statement is true or false
True
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If inflation does not adjust rapidly in the short run, then when the Federal Reserve increases the nominal interest rate, the real interest rate in the short run will ________.
A. decrease B. be determined by saving and investment decisions. C. increase D. not change
Which of the following theories fails to explain persistent unemployment?
A) classical theory B) Friedman and Phelps fooling theory C) new Keynesian theory D) Both A and B are correct.
Why does the industry short-run supply curve slope upward?
What will be an ideal response?
If economists estimate the price elasticity of demand to be 0.75 for good X and 1.25 for good Y, then the government can raise the most revenue by taxing good Y
Indicate whether the statement is true or false