Which of the following groups believes that people will realize what the government is attempting to do and take action to offset government policy?
A. Modern Keynesians.
B. New classical economists.
C. Supply-siders.
D. Marxists.
Answer: B
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If U.S. prices increase relative to the rest of the world, we would expect:
A. imports to increase and net exports to increase. B. exports to decrease and net exports to decrease. C. imports to increase and net exports to increase. D. exports to decrease and net exports to increase.
A potential cause of competitive market failure is symmetric information.
Answer the following statement true (T) or false (F)
Which of the following explains why a monetary policy in a nation with an exchange rate peg, such as Denmark, would NOT be possible?
a. The nation must keep its import tariffs in sync with the import tariffs of the nation to which it pegs. b. The nation must keep its price level and nominal interest rate equal to the price level and nominal interest rate in the nation to which it pegs. c. The nation must keep its taxes and budget deficit in sync with taxes and budget deficit in the nation to which it pegs. d. The nation is no longer able to print its own money, since it is using the currency of the nation to which it pegs.
If a firm's sales are $16 million, its fixed costs $18 million, and its variable costs $15 million, what does it do in the (a) short run? (b) long run?
What will be an ideal response?