The conventional monetary policy to fight recessions would be to
A. increase the rate of monetary growth.
B. decrease the rate of monetary growth.
C. run a government surplus.
D. run a government deficit.
A. increase the rate of monetary growth.
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According to the substitution effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:
a. purchase more complementary goods. b. purchase more substitute goods. c. purchase fewer substitute goods. d. have more real income.
Refer to the information below. It is clear that diminishing returns sets in after ________ workers per day.Number ofWorkers Per DayOutputPer Day0011328315424532639
A. 3 B. 4 C. 5 D. 6
Elmer's Glue has captured the market for school glue. It is preferred by both students and parents alike. It takes very little capitalization to enter the market, but nobody succeeds in doing so. The glue clearly needs no patents or secret formulas. This type of market is called a(n)
A. monopolistic competition. B. pure or perfect competition. C. monopoly. D. oligopoly.
What does the classical model predict will happen when an increase in aggregate demand causes the overall price level to rise?
a. Sticky upward prices will allow producers to quickly boost their output. b. Input suppliers will compete against each to quickly drive down input prices. c. A prolonged inflationary gap will occur at the higher price level. d. Input suppliers will bid up input prices to quickly adjust to the higher price level.