Classical economists believed that the economy automatically moves toward equilibrium at full employment
a. True
b. False
Indicate whether the statement is true or false
True
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Other things constant, when households decide to save more, the supply of credit ________ and interest rates ________
A) falls; rise B) falls; fall C) rises; rise D) rises; fall
In Figure 5-19, the consumer experiences at point C
A. greater total utility than at point D. B. greater total utility than at point E. C. less total utility than at point D. D. total utility equal to that experienced at point D.
When decision rights are decentralized, typically
a. decisions are being moved to those with more of the relevant information b. decisions are being moved to those with stronger incentives to make good decisions c. decisions are being moved from those with more of the relevant information d. decisions are being moved from those with weaker incentives to make good decisions
A firm in a perfectly competitive industry
A. is unaffected by the entrance of new firms into the industry, since entering firms affect only the prices they themselves receive. B. always produces more output in the long run than in the short run. C. may choose a different output in the long run than in the short run. D. earns economic profit in the long run but not in the short run.