The main criticism of those who doubt the ability of the government to respond in a useful way to the business cycle is that the theory by which money and government expenditures change output is flawed
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following would be inconsistent with the notion of a competitive market process and the notion of perfect competition?
A) Price searching behavior B) Predatory pricing C) Advertising D) Licenses and other legal restrictions on entry E) Hostile takeovers
If the cross elasticity of demand for potato chips and pretzels equals 1.5,
A. potato chips and pretzels must both be luxury goods. B. either potato chips or pretzels must be a luxury good, and both may be luxury goods. C. potato chips and pretzels must be substitutes. D. potato chips and pretzels must be complements.
The Federal Reserve:
A. is fairly independent of the rest of government. B. works closely with the Treasury department. C. is easily swayed by political pressure. D. has become an ineffective policy-making body in the last decade.
The growth rate of real GDP per capita is best captured by subtracting the percentage changes in:
A. both prices and population from the nominal GDP growth rate. B. population from the nominal GDP growth rate, while dividing it by the inflation rate in order to hold prices constant. C. population from the nominal GDP growth rate and not the percentage changes in prices. D. prices from the nominal GDP growth rate and not the population growth.