In the Classical system, the total output of goods and services and total employment are determined by all of the following except
A) the interest rate.
B) the labor force.
C) the supply of capital.
D) existing technology.
A
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If the graph shown is displaying a competitive market and the market is currently offering a wage less than P*:
A. there would be a shortage of workers who want to work at that wage.
B. there would not be unemployment in the market.
C. firms would have a hard time finding employees.
D. All of these statements are true.
Use the law of diminishing marginal utility to explain why a pizza parlor might price pizzas in the following way: "Buy one pizza for $12, get the second pizza for $6." Why not simply charge $9 per pizza instead?
New classical economists believe that
A. wage and price controls are needed to help control inflation. B. governmental intervention is destabilizing and harmful to the economy. C. the federal government has abdicated its responsibility to promote a non-inflationary full employment economy. D. antitrust laws should be toughened in order to restrain inflation.
Which of the following is definitely true if the economy is in macro equilibrium?
A. The price level is optimal, but the output level may not be B. The output level is optimal, but the price level may not be C. The price level and the output level are both optimal D. The price level and the output level may or may not be optimal.