Which statement is FALSE?
A. Wages are not downwardly flexible.
B. The rational expectations theorists argue that there is a natural level of real GDP toward which the economy gravitates.
C. The rational expectations theorists believe anti-recession policies have no effect, but admit anti-inflationary policies may be wise.
D. The rational expectations theorists believe that aggregate supply is the prime economic mover.
C. The rational expectations theorists believe anti-recession policies have no effect, but admit anti-inflationary policies may be wise.
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A $100 increase in both government expenditure and taxes will
a. cancel each other out so that the equilibrium level of output will remain unchanged b. lead to a $100 decrease in the equilibrium level of output c. lead to a $100 increase in the equilibrium level of output d. lead to a greater than $100 increase in the equilibrium level of output e. lead to a less than $100 increase in the equilibrium level of output
The first formal acknowledgement of the primary macroeconomic goals of price stability, high employment, and promoting economic growth in the United States came with passage of the: a. Federal Reserve Act of 1913
b. the Sherman Antitrust Act of 1890. c. the Social Security Act of 1935. d. the Employment Act of 1946.
Indirect business taxes refer to
A. dividend taxes paid by the corporation. B. sales and local taxes paid by business. C. payments for low-skilled labor. D. depreciation expenses.
A fundamental principle of international trade is that
A. a country could never have lower resource costs than other countries in the production of ALL goods and services. B. a country could never have lower opportunity costs than other countries in the production of ALL goods and services. C. two nations could both have a comparative advantage over each other in production of the same good. D. the world gains from trade because trade allows production of goods and services to move to nations with the lowest resource cost.