New Keynesians and new classical economists both believe that
a. people form their expectations rationally.
b. aggregate demand movements primarily drive business cycles.
c. individual agents engage in optimizing behavior.
d. The key source of disagreement centered around how people form their expectations.
e. all but d are correct.
B
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Describe the difference between technology and positive technological change
What will be an ideal response?
Most business people calculate marginal cost and marginal revenue to decide how much to produce
a. True b. False Indicate whether the statement is true or false
The "crowding-out" debate refers to the disagreement between Keynesians and conservative economists about whether
A. spending for national defense causes reductions in the spending for social welfare. B. government contracts with suppliers of military weapons results in unfair competition with non-defense related industries. C. increased government borrowing has an adverse effect on private investment spending. D. restrictive monetary policy makes expansionary fiscal policy ineffective.
For the cost function C(Q) = 100 + 4Q + 19Q2 + 2Q3, what is the marginal cost of producing the fourth unit of output?
A. $295 B. $116 C. $42 D. $252