Real business cycle theorists agree with new Keynesian economists that
a. agents maximize utility.
b. the labor market do not clear.
c. AS shocks can play a big role in business cycles.
d. Both a and c.
D
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Sherri has decided that with the two hours in between classes she can do one of 3 things. She has ranked her choices, from highest to lowest as, (1) chat with her friends, (2) study history or (3) take a nap. The opportunity cost of chatting with her friends is
A. the combined value of studying history and taking a nap. B. the value of studying history, the next best use of time. C. zero since she does not pay her friends to talk to her. D. the value of chatting with her friends.
If the MPS is 0.8 and t is 0.3, then the tax multiplier is about -1.03.
Answer the following statement true (T) or false (F)
The phrase "a weaker U.S. dollar" means that the dollar
a. has been depreciating b. has been appreciating c. is not in equilibrium on the foriegn exchange market d. is fluctuating greatly e. buys less than one unit of a foreign currency
Which of the following is a major shortcoming of government regulation of business monopoly?
a. The regulators often estimate production costs incorrectly and thus force firms into loss positions. b. The regulators often come to represent the interests of the established firms and use their power to limit competition. c. The regulators usually permit firms to make unusually high accounting profits. d. The regulators, acting in consumers' interests, often force prices so low that even with efficient production techniques the regulated firms lose money.