According to some New Keynesian theories, one possible rationale for active policy making is
A. flexible prices.
B. growing competition in U.S. product markets.
C. people are not rational and so do not react to incentives.
D. sluggish adjustment of the price level in response to changes in aggregate demand
Answer: D
You might also like to view...
What other markets were affected by the decline in the housing market beginning in 2006? Briefly explain why
What will be an ideal response?
If a firm finds itself operating in Stage I, it implies that
A) variable inputs are extremely expensive. B) it overinvested in fixed capacity. C) it underinvested in fixed capacity. D) fixed inputs are extremely expensive.
The larger is the marginal propensity to consume (MPC)
A) the larger is the multiplier. B) the smaller is the multiplier. C) the smaller is the slope of the consumption function. D) the larger is the slope of the saving function.
Refer to the above table. What does the marginal physical product equal when the amount of labor goes from 11 to 12 units?
A) 600 B) 90 C) 100 D) 690