Why might policymakers attempts to stabilize the economy do more harm than good?
Policy works with a lag. By the time policy is implemented and takes effect, economic conditions may have changed.
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A price index can be constructed by: a. dividing the value of a market basket by the rate of inflation
b. dividing the current-year value of a market basket by the base-year value of the same market basket and multiplying by 100. c. multiplying the value of a market basket by the rate of inflation. d. multiplying the current-year value of a market basket by the base-year value of the same market basket and dividing by 100.
When taxes on the return to capital in a given economy are reduced, it causes firms to employ __________ capital goods. In terms of the production function (graphed with labor on the horizontal axis and Real GDP on the vertical axis), this then causes ____________________ which makes the LRAS curve shift ____________ resulting in ______________________
A) less; the production function to shift downward; leftward; a shrinking economy B) more; the production function to shift upward; rightward; economic growth C) more; a movement up along a given production function; rightward; economic growth D) more; a movement down along a given production function; leftward; a shrinking economy
Demand is based on:
a. desires, regardless of ability to pay. b. needs and wants, and the ability to pay. c. what supplies can provide. d. government calculations.
The market for labor services is included in the
a. loanable funds market. b. goods and services market. c. resource market. d. financial market.