Keynesians believe a change in the money supply cannot lower the unemployment rate.
Indicate whether the statement is true or false.
Ans: False
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Assume that the LCD and plasma television sets industry is perfectly competitive. Suppose a producer develops a successful innovation that enables it to lower its cost of production. What happens in the short run and in the long run?
A) The firm will probably incur losses temporarily because of the high cost of the innovation, but in the long run it will start earning positive profits. B) The firm will be able to increase its economic profits temporarily, but in the long run its economic profits will be eliminated as other firms copy the innovation. C) Initially, the firm will be able to increase its profit significantly, but in the long run its profits will still be greater than zero but lower than its short-run profits because other firms would also innovate. D) This firm will be able to earn above normal profits indefinitely if it obtains a patent for its innovation.
Which of the following shocks have been emphasized most often with respect to real business cycle theory?
a. Shocks to technology b. Variations in environmental conditions c. Changes in the real (relative) prices of imported raw materials d. Changes in tax rates e. None of the above
A dramatic increase in the birth rate will have what immediate effect on the disposable diaper market?
a. supply decreases now b. supply increases now c. demand decreases now d. demand increases now e. supply and demand stay the same now
Which of the following statements would appeal to someone who favors an expanded public sector as the basis of expansionary fiscal policy?
a. "The government isn't the solution; it's the problem." b. "The government that governs least governs best." c. "The American people want national defense; they want laws to be enforced; they want federal support for education and environmental protection, and they want transfer payments for the elderly and unemployed." d. "If you ever got anything good out of the government you can be sure that some rich so-and-so got more."