What two principles of mercantilism did the classicists attack?
What will be an ideal response?
The belief that the wealth and power of a nation were determined by its stock of precious metals and the belief in the need for state action to direct the development of the capitalist system.
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If a market is subject to a positive externality,
A) the demand curve reflecting social benefit will be to the right of the demand curve representing private benefit. B) there is only one demand curve. C) the demand curve reflecting social benefit will be to the left of the demand curve representing private benefit. D) private benefit will exceed social benefit.
The biggest conceptual difference between using VARs for forecasting and using them for structural modeling is that
A) you need to use the Granger causality test for structural modeling. B) structural modeling requires very specific assumptions derived from economic theory and institutional knowledge of what is exogenous and what is not. C) you can no longer use the information criteria to decide on the lag length. D) structural modeling only allows a maximum of three equations in the VAR.
According to Walton and Rockoff, which of the following was the most important in bringing the banking crises of the 1930s to an end?
a. the elimination of many weak banks through bankruptcy (survival of the fittest) b. the promise of federal bank deposit insurance c. New Deal spending programs d. World War II
The term economic growth can be used in reference to absolute real economic growth or to per- capita real economic growth
Indicate whether the statement is true or false