Although a balanced budget may be appropriate under one monetary policy, a deficit or surplus may be appropriate under a different monetary policy
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following explains why higher prices in the goods and services market will lead to an upward sloping short-run aggregate supply curve?
a. The higher prices will temporarily improve profit margins because many of the cost components of firms will be fixed in the short run. b. The higher prices will reduce the purchasing power of the fixed quantity of money and, thereby, stimulate additional output. c. The higher prices will expand the economy's resource base and, thereby, stimulate additional output. d. The higher prices will improve technology and, thereby, stimulate additional output.
The basic economic problem is a situation of
A. limited incomes and unlimited choices. B. limited resources and unlimited wants. C. both limited resources and limited wants. D. unlimited incomes and limited choices.
During the great canal-building era, from roughly 1815 to 1843, Hughes and Cain (2011) claim that
(a) most canals earned normal profits. (b) no canals earned profits. (c) all canals in the initial period of construction earned normal profits but none did in the later period because of over-construction and competition from the railroads. (d) the Erie Canal was one of the few, perhaps the only one, to earn normal profits.
________ can provide incentives to honor implicit contracts.
A. Value maximization B. Adverse selection C. Bargaining power D. Reputational concerns