A bubble is defined to be when:
A. an asset is not being traded very heavily.
B. financial advisors purposely trying to deceive the public and sell a worthless asset.
C. when the financial markets are trading an asset at much higher than historically justifiable prices.
D. there are a limited number of buyers of an asset which causes the market to crash.
C. when the financial markets are trading an asset at much higher than historically justifiable prices.
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In a production possibilities frontier model, a point inside the frontier is
A) productively and allocatively inefficient. B) productively inefficient. C) productively efficient. D) allocatively efficient.
A fixed exchange rate system reduces the impact of
A) variations in the demand for real money balances on real incomes. B) the volatility of aggregate expenditures on real incomes. C) crowding out from fiscal expenditures. D) the beggar-thy-neighbor effect.
Western expansion contributed to U.S. growth and development of the economy by
(a) privately mobilizing idle natural resources and land. (b) placing land in the hands of the public, with no private rights. (c) having government officials set land prices. (d) all of the above.
If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level
a. and output are higher than in the original long-run equilibrium. b. and output are lower than in the original long-run equilibrium. c. is lower and output is the same as the original long-run equilibrium. d. is the same and output is lower than in the original long-run equilibrium.