Those who favor active policymaking argue that all of the following exist EXCEPT
A. perfectly flexible wages and prices.
B. aggregate demand shocks can influence real Gross Domestic Product (GDP) and unemployment.
C. inflation and unemployment are stable in the short run and predictable in the long run.
D. pure competition is not typical.
Answer: A
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If the HHI for the widget industry is 1,200, then the market structure is
A) a monopoly. B) monopolistic competition. C) an oligopoly. D) perfect competition. E) impossible to determine
Deadweight loss occurs when
A) consumer surplus is greater than producer surplus. B) surplus losses to one group due to intervention are not offset by surplus gains to another. C) consumer surplus is reduced. D) consumer surplus is negative.
In economic terminology, when a resource is used to produce output it is referred to as
A) an intangible. B) a factor of production. C) a service. D) a fifth element.
The market for microcomputers (PCs) is fairly competitive and the products are somewhat homogeneous. Over time, new firms have entered the market to make profit on new configurations of the microcomputer, and profits
A. have become razor thin for many producers. B. have stayed the same for most firms. C. have not influenced the decisions of the firms D. have risen dramatically.