Which of the following statements is true?
A. A political business cycle is one created by the incentive for politicians to make policies in accordance with benefit-cost analysis.
B. Adaptive expectations theory argues that the best indicator of the future is all of the available information.
C. Incomes policies tend to be very effective over time.
D. Incomes policies include jawboning, wage-price guidelines, and wage-price controls.
Answer: D
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An increase in investment spending will be multiplied into a larger increase in GDP illustrates the concept of
A. expansionary fiscal policy. B. the multiplier. C. an inflationary boom. D. international trade.
Why does competition lead to lower prices for consumers?
A. Companies do not lower prices for consumers. B. Companies bid down each other to get your business. C. Companies bid against each other to get workers at minimum wage. D. Companies can find cheaper resources.
The market value of all final goods and services in an economy produced by resources owned by people of that economy is:
a. personal income. b. national income. c. capital income. d. gross national product. e. gross domestic product.
In real-world markets
a. economic efficiency is rare because making voluntary transactions is difficult b. economic efficiency is rare because Pareto improvements are difficult to make c. economic efficiency is best thought of as a continuum d. perfect competition is an impediment to economic efficiency e. every possible Pareto improvement is exploited