According to Real Business Cycle theory,
a) lack of consumer confidence causes most business cycles
b) price fluctuations are unimportant because they affect nominal, not real GDP
c) recessions are an optimal response to negative technology shocks
d) fiscal policy is the most appropriate way to smooth out economic fluctuations
e) labor supply curves are extremely steep
c) recessions are an optimal response to negative technology shocks
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What is the capital accumulation equation used by Solow?
What will be an ideal response?
Repeated play can change the outcome in sequential games by:
A. reducing the first-mover advantage. B. removing the incentive to cooperate. C. making collusion more probable. D. increasing the incentive to defect.
Economists generally prefer greater effort made to force internalization of externalities through taxes rather than using alternative approaches, such as establishing pollution standards
a. True b. False Indicate whether the statement is true or false
If the MRP of labor in a firm is $67, and the MLC equals $56, what would you advise the firm to do?
a. Stay at its current output level. b. Hire additional workers. c. Raise prices. d. Reduce employment. e. Reduce the wage rate.