The notion that the demand for inputs depends on the demand for outputs is termed
a. inverse demand.
b. derived demand.
c. proportional demand.
d. complementary demand.
B
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The idea that what’s good for one person may not be good for all people is known as the
a. cause-effect fallacy. b. fallacy of composition. c. moral hazard problem. d. disequilibrium position.
According to Keynesians, the primary source of business cycle fluctuations is
A) aggregate demand shocks. B) productivity shocks. C) oil price shocks. D) consumer confidence shocks.
Which of the following statements is correct?
A. Low prices may not always be in the public interest. B. If prices on scarce resources are set “too low,” consumers will receive the “wrong” signals and be encouraged to consume more, thus squandering resources. C. Raising prices on scarce resources is generally politically unpopular. D. All of the responses are correct.
Which of the following contributed to the weak recovery from the 2008-2009 recession?
a. the restrictive monetary policy followed by the Fed b. constant policy changes that created uncertainty and thereby retarded private business investment c. sharp reductions in federal spending that were designed to achieve a balanced federal budget d. failure to run budget deficits that were large enough to exert an impact on aggregate demand