Which of the following statements is (are) correct? In the classical system,
a. aggregate demand is the primary determinate of the natural rate of output and employment.
b. both output and employment are self-adjusting towards the natural rates of output and employment.
c. changes in aggregate supply drives changes in output in the short-run and in the long-run.
d. only output is self-adjusting to the supply-determined full-employment levels.
B
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The diagram used to show one player's strategies across the top and the other player's strategies along the left, with the corresponding outcomes in the appropriate boxes is a
a. game matrix. b. flow chart. c. mixed strategy. d. an oligopoly problem.
Rate of return regulation is designed to allow a natural monopoly to
A) make an economic profit. B) make zero economic profit. C) underestimate its average cost. D) compete with any firm entering the market. E) make zero normal profit.
John has $40 to spend on pizza and tacos. Pizza costs $10 each and tacos are $1 per taco. John's real income ________
A) is $40 B) is 4 pizzas or 40 tacos C) is 4 pizzas plus 40 tacos D) depends only on his money wage
Why is the multiplier for contractionary fiscal policy smaller in an open economy?
A) Contractionary fiscal policy reduces the deficit, which raises the interest rate, which raises the foreign exchange value of the dollar, which increases net exports. B) Contractionary fiscal policy increases the deficit, which raises the interest rate, which reduces the foreign exchange value of the dollar, which increases net exports. C) Contractionary fiscal policy reduces the deficit, which reduces the interest rate, which reduces the foreign exchange value of the dollar, which decreases net exports. D) Contractionary fiscal policy reduces the deficit, which reduces the interest rate, which reduces the foreign exchange value of the dollar, which increases net exports.