According to Kahneman and Tversky's value function, which of the following gifts provide higher total values:
A. 4 different gains of $25 each
B. 1 gain of $100 each
C. 2 different gains of $50 each
D. All provide exactly the same value
Answer: A
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Inflation caused by an increase in aggregate spending is referred to as:
a. Hyperinflation b. Demand-push inflation c. Cost-push inflation d. Demand-pull inflation
The best argument against monetarists' arguments that steady money growth would prevent fluctuations in inflation and unemployment is that:
a. the government has best control over fiscal policy and should focus on that. b. large fluctuations in the money supply cannot occur because the supply of money is limited. c. steady money growth does not necessarily mean steady aggregate demand if velocity is not stable. d. steady growth in the money supply percents fluctuations in output only if aggregate prices are constant.
If demand decreases and supply increases, price will
a. always increase b. always decrease c. increase only if supply increases more than demand decreases d. increase only if supply increases less than demand decreases e. decrease only if supply increases more than demand decreases
According to Keynes, if private sector demand is insufficient to maintain full employment, the government should: a. make the economy's natural transition to a lower level of employment as easy as possible. b. shock the economy with an increase in aggregate demand
c. reduce aggregate supply to reduce inflation. d. print money to promote consumer spending. e. take steps to increase aggregate supply in an economy.