The classical model does a poor job of explaining the __________ because it assumes that the __________ always clears
a. long run; labor market.
b. long run; financial market.
c. short run; labor market.
d. short run; financial market.
e. short run; housing market.
C
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The real-nominal principle states that
A) what matters to people is the face value of money or income. B) people respond more to explicit, or real, costs than to implicit costs. C) people respond more to implicit costs than to explicit costs. D) what matters to people is the purchasing power of money or income.
Car A gets 20 miles per gallon, and sells for $17,000. Car B gets 40 miles per gallon, and sells for $34,000. In the economic way of thinking, which car is more efficient?
A) Car A B) Car B C) Both are equally efficient. D) It depends on the car buyer's estimate of cost and benefit. E) It depends on a number of statistical tests done by economists, the results of which are not stated in the question.
Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?
A) Countries that are relatively poor are more likely to experience wars and revolutions. B) Countries that are relatively poor are likely to have a lower quality of health care. C) Many of these developing countries do not have a functioning court system that can enforce laws. D) all of the above
The marginal revenue product of labor is the:
A. change in labor necessary to produce an additional unit of output. B. cost of additional labor necessary to produce an additional unit of output. C. change in output resulting from adding an additional unit of labor. D. change in revenue resulting from adding an additional unit of labor.