The political business cycle refers to
a. the fact that about every four years some politician advocates greater government control of the Fed.
b. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
c. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle.
d. changes in output created by the monetary rule the Fed must follow.
b
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Refer to the scenario above. The principal in this case is:
A) $300. B) $1,000. C) $1,300. D) $2,300.
Would a profit-maximizing firm sell where demand is inelastic?
A. No, this would not follow the rule of MC = MR. B. No, the firm could not profitably raise price. C. Yes, the firm could profitably lower price to attract sales. D. Yes, in this case there are few substitutes for the good.
The supply for products that exhibit cost externalities is generally ________ the supply for products that do not
A) greater than B) less than C) the same as D) greater or less (depending on the market) than
Which of the following is an example of featherbedding?
a. a craft union's restricting entry into its profession b. a union-imposed wage floor c. an increase in labor productivity that results from a decrease in quit rates d. attempts to reduce the sale of nonunion goods e. a construction workers union's requiring an unnecessarily large number of workers to do a particular job