What is the underlying assumption of the original, simplified Keynesian model?

A) The relevant range of the short-run aggregate supply curve (SRAS) is vertical.
B) The relevant range of the aggregate supply curve (AS) is vertical.
C) The relevant range of the short-run aggregate supply curve (SRAS) is horizontal.
D) The relevant range of the long-run aggregate supply curve (LRAS) is horizontal.


C

Economics

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Which of the following would NOT be a way to increase the return on equity?

A) Buy back bank stock. B) Pay higher dividends. C) Acquire new funds by selling negotiable CDs and increase assets with them. D) Sell more bank stock.

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Use the classical (RBC) IS—LM—FE model to show the effects on the economy of a temporary beneficial supply shock; for example, a decrease in the price of oil

You should show the impact on the real wage, employment, output, the real interest rate, consumption, investment, and the price level.

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The prisoner's dilemma shows that

A) players are better off if they act independently. B) monopolies are beneficial to society. C) people will always cheat. D) players would be better off if they cooperated.

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The larger the proportion of the consumer's budget that is spent on a product, the more elastic that consumer's demand for the product will be

a. True b. False

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