The real business cycle theory is based on all of the assumptions below EXCEPT
A. flexible prices.
B. the absence of rationality among people.
C. pure competition.
D. flexible wages.
Answer: B
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A demand curve is defined as the relationship between
A) the income of consumers and the quantity of a good that producers are willing to sell. B) the income of consumers and the quantity of a good that consumers are willing to buy. C) the price of a good and the quantity of that good that producers are willing to sell. D) the price of a good and the quantity of that good that consumers are willing to buy.
In economics as well as in social relations in general, clear and concise information
A) eliminates the need for cooperation. B) guarantees effective cooperation. C) makes cooperation easier to achieve. D) makes cooperation more difficult to achieve.
Because it is a unit of account, money
A) increases transaction costs. B) reduces the number of prices that need to be calculated. C) does not earn interest. D) discourages specialization.
If a firm's demand is subject to random fluctuations, the firm's ________ will also be random.
A) marginal revenue B) average total cost C) average variable cost D) marginal cost