What do Keynesians mean when they say that "you can't push on a string"?
A) An increase in the supply of goods does not really create its own demand.
B) If the government reduces taxes in an attempt to increase household consumption, it will not always work.
C) An increase in the money supply will not always stimulate the economy.
D) If the government wants to get something done, the best way is not to force the issue, but to offer incentives.
E) If the government puts too much expansionary pressure on the economy, it will probably "overheat."
C
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The ________ of labor in a perfectly competitive labor market is the market wage rate.
A. supply B. marginal cost of a unit C. total cost D. marginal revenue from a unit
If a bank borrows from a Federal Reserve Bank, the interest rate is called
A) the prime rate. B) the discount rate. C) the Fed funds rate. D) the reserve availability rate.
Intermediate targets are
A) identical to instruments. B) macroeconomic variables that the Fed can influence that are related to the Fed's goals. C) also known as the Fed's tools. D) macroeconomic variables that never get revised.
Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.
In the short run, firms in this market will shut down if the market price is:
A. less than $10. B. less than $5 C. less than $15. D. greater than $10.