In an open economy, ______ than in a closed economy.
a. expansionary policy will have a greater influence on aggregate demand
b. contractionary policy will have a greater influence on aggregate demand
c. both contractionary and expansionary policy will have a greater influence on aggregate demand
d. both contractionary and expansionary policy will have a smaller influence on aggregate demand
d. both contractionary and expansionary policy will have a smaller influence on aggregate demand
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Why do some economists think that taxing capital gains results in a locked-in effect?
What will be an ideal response?
The existence of asymmetric information can give rise to adverse selection
a. True b. False
Figure 10.1 depicts a firm's marginal revenue product curve. If the firm maximizes its profit and the hourly wage is $15, how many hours of labor will the firm demand?
A. smaller than 30 hours B. between 30 hours and 40 hours C. between 40 hours and 50 hours D. greater than 50 hours
What allows a Federal Reserve note to function as money?
A. Regulation B. Banks C. Government D. Social convention