Real business cycle theory explains fluctuations in output through:
A. changes in productivity.
B. changes in aggregate demand.
C. changes in monetary policy.
D. shifts of the short-run aggregate supply curve.
Answer: A
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When economic profits are positive, accounting profits could be:
A. positive. B. negative. C. zero. D. All of these are possible.
Free markets produce too little output when
a. negative externalities exist b. positive externalities exist c. production uses fixed-production technology d. production uses variable technology e. the resource is exhaustible
If you will receive $5,000 two years from today, what is its present value if the discount rate is 5 percent?
a. $5,025 b. $4,500 c. $3,429 d. $4,535 e. $4,762
A possible rational reason why older people, on average, show less interest in learning how to use new technologies is because
A. they are acting irrationally. B. the financial cost for older people is greater than the cost to younger people. C. they have fewer years to gain a return from learning how to use new technologies. D. older people are not as smart as (today's) young people.