The classical economists argued that the production of goods and services (supply) generates an equal amount of total income and, in turn, total spending. This theory is called:
a. Keynes' General Theory.
b. Say's Law.
c. the "animal spirits" theory.
d. the law of autonomous consumption.
b
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A country will realize no gains from trade if
A) pre-trade and free-trade relative prices are identical. B) all countries employ the same technology. C) it does not have an absolute advantage in at least one good. D) its wage exceeds the world average. E) pre-trade and free-trade relative prices are not identical.
In which model does there not exist a tradeoff between higher inflation and lower unemployment?
a. monetarist b. real business cycle c. new classical d. classical e. a tradeoff exists in all of the above
To keep employees from shirking, invest in greater monitoring
a. when monitoring is expensive relative to its benefits b. especially when monitoring is efficient c. when employees respond well to incentive contracts d. when incentives solve both moral hazard and adverse selection problems with employees
In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?
a. The production possibilities curves for these countries would have shifted outward. b. The production possibilities curves for these countries would have shifted inward. c. The production possibilities curves for these countries would have been unaffected. d. This would have been illustrated by a movement along the production possibilities curves for these countries, but it would not have shifted them.