Which of the following ideas is associated with mainstream economics?
A. Capitalist economies tend to be stable
B. Monetary policy rules are desirable
C. Fiscal policy is a useful stabilization tool
D. Crowding-out of investment makes fiscal policy ineffective
C. Fiscal policy is a useful stabilization tool
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Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run, there is free entry into the market. What is the dairy's total cost function?
A. TC = 2Q2 + 4Q B. TC = 4Q + 50 C. TC = 2Q2 + 50 D. TC = 2Q2 + 4Q + 50
The threat of a corporate takeover is an ________ incentive that helps to mitigate the ________ principal-agent problem.
A. internal; manager-consumer B. external; owner-consumer C. external; owner-manager D. internal; manager-worker
"Reagonomics" was consistent with supply-side economics except for the fact that it
a. pushed for lower money growth. b. called for higher total government spending. c. pushed for tax cuts. d. pushed for reductions in nonmilitary government spending.
A shortage occurs whenever
a. quantity demanded exceeds quantity supplied at the equilibrium price b. price is less than equilibrium price c. quantity demanded is less than quantity supplied d. goods are scarce e. some of the people who need the product are not willing and able to buy it at the equilibrium price