Economists are very good at explaining how individual markets work. Economists are less successful at explaining
A. market pricing.
B. recessions and inflation.
C. central planning.
D. business firm profits.
Answer: B
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Which of the following is a correct statement about production possibilities frontiers?
a. An economy can produce only on the production possibilities frontier. b. An economy can produce at any point inside or outside a production possibilities frontier. c. An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. d. An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.
The study of the decision-making process of government is the study of:
a. Keynesian economics. b. public choice theory. c. rational expectations theory. d. social economics.
When a firm's demand curve is tangent to its average total cost curve, the
a. firm's economic profit is zero. b. firm must be earning economic profits. c. firm must be incurring economic losses. d. firm must be operating at its efficient scale.
Under Alan Greenspan, the Fed:
A. Targeted interest rates only. B. Targeted the money supply only. C. Targeted the unemployment level. D. Used a mix of money-supply and interest-rate adjustments.