Which of the following statements would Keynes have been most likely to agree with?
A) Saving is more responsive to changes in interest rates than to changes in income.
B) Say's law holds in both a barter and money economy.
C) The internal structure of the economy is not always competitive enough to allow prices to fall.
D) Investment is exclusively dependent upon the interest rate.
E) none of the above
C
You might also like to view...
Ignoring taxes when making redistributive decisions has no impact on equity.
A. True B. False C. Uncertain
For the United States, there is somewhat conflicting evidence whether or not the inflation rate has a unit autoregressive root
For example, for the sample period 1962:I to 1999:IV using the ADF statistic, you cannot reject at the 5% significance level that inflation contains a stochastic trend. However the null hypothesis can be rejected at the 10% significance level. The DF-GLS test rejects the null hypothesis at the five percent level. This result turns out to be sensitive to the number of lags chosen and the sample period. (a) Somewhat intrigued by these findings, you decide to repeat the exercise using Canadian data. Letting the AIC choose the lag length of the ADF regression, which turns out to be three, the ADF statistic is (-1.91). What is your decision regarding the null hypothesis? (b) You also calculate the DF-GLS statistic, which turns out to be (-1.23). Can you reject the null hypothesis in this case? (c) Is it possible for the two test statistics to yield different answers and if so, why? What will be an ideal response?
Positive economic principles are those that:
A. predict how people will behave. B. are influenced by political ideology. C. are always correct. D. indicate how people should behave.
Explain why an investor cannot simply compare the size of promised payments from different investments, even if the interest rates and other risk factors are the same.
What will be an ideal response?