Gordon suggests that full indexation of production costs to nominal AD would solve the macroeconomic externality. However, individual firms would be unlikely to extend full indexation to their workers because
A) its local customers may not buy its products at the new price level.
B) its suppliers may reside in foreign countries and are therefore, not subject to indexation.
C) other competitor firms will not index their wages.
D) All of the above.
D
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The primary benefit to the macroeconomy of increasing government spending is a(n)
A. decrease in the price level. B. decrease in real GDP. C. increase in the price level. D. decrease in the unemployment rate.
This table shows the demand and supply schedule of a good.Price of GoodQDemandQsupply$0.005025$0.504026$1.003528$1.503131$2.002835$2.502740According to the table shown, at a price of $2.00 quantity demanded:
A. exceeds quantity supplied and a shortage exists. B. is less than quantity supplied and a surplus exists. C. exceeds quantity supplied and a surplus exists. D. is less than quantity supplied and a shortage exists.
Disinvestment occurs when:
A. Businesses sell machinery and equipment to one another B. The prices of investment goods rise faster than the prices of consumer goods C. Businesses have larger inventories at the end of the year than they had at the start D. The consumption of private fixed capital exceeds gross private domestic investment
If there is no scarcity,
A) choices are no longer rational. B) all marginal benefits would equal zero. C) the opportunity cost of an action would be greater than its sunk cost. D) marginal cost of an action is greater than its marginal benefit. E) an action would have zero opportunity cost.