Given the assumptions of the classical model
A) the economy will often experience recessions and expansions.
B) expansion will be the normal condition, but recessions will often be severe and require government intervention.
C) the macroeconomy is erratic, and problems will often be increased over time.
D) the market is a self-correcting mechanism.
D
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The ________ determines the supply of money
A) Federal Reserve B) banking system C) President D) Congress
A contractionary monetary policy shifts the LM curve to the ________, reducing ________, everything else held constant
A) left; output and increasing interest rates B) left; both real output and interest rates C) right; both interest rates and real output D) right; interest rates and increasing real output
A monopolist always selects a price on the elastic portion of its demand curve
a. True b. False Indicate whether the statement is true or false
If the government decides to set the price of widgets below the equilibrium price
A. producers of widgets are now better off. B. most economists would argue that one could reallocate resources and improve total welfare in the system. C. the market quantity of widgets will increase. D. people who buy the widgets are now worse off.