The more that firms in an economy believe that the demand for their goods is mainly influenced by the aggregate level of demand and not "local conditions," the ________ is the SAS curve and thus the ________ are cycles in real GDP
A) steeper, larger
B) steeper, smaller
C) flatter, larger
D) flatter, smaller
B
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According to Keynes, the money demand function
a. did not change as the return on other assets changed. b. changes with output. c. shifts with changes in the public confidence in the economy. d. both b and c. e. all of the above.
Most individuals save at banks rather than lend directly because:
A. banks can reduce the cost of information asymmetry. B. moral hazard exists only when individuals make loans directly to borrowers, it does not occur when banks issue loans. C. information asymmetry is a problem for individuals but not for banks. D. the bank creates information asymmetry.
In _____ the OPEC national quadrupled the price of oil.
Fill in the blank(s) with the appropriate word(s).
In the long run, all firms in a perfectly competitive industry
A) earn economic profits. B) break even. C) suffer economic losses. D) sell differentiated products to earn economic profits.