Being guided by self-interest when making a decision means that you
a. act in a selfish manner
b. attempt to maximize utility
c. ignore the wishes of your family
d. reduce the incentives of others
Ans: b. attempt to maximize utility
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Trish grows oregano in her backyard to use in her homemade pesto sauce. How is this gardening included in GDP?
a. It is included in real GDP. b. It is included in nominal GDP. c. It is not included in GDP. d. It is included as an intermediate good.
According to classical economists, in an economy where people possess rational expectations, adjustments occur very slowly
a. True b. False Indicate whether the statement is true or false
A direct or positive relationship exists between a country's
a. productivity and its standard of living. b. amount of government spending and its productivity. c. total population and its average citizen's income. d. rate of population growth and the extent of its trade with other countries.
Which of the following is NOT part of Keynes's criticism of the classical theory of employment?
A. A reduction in wage rates will lead only to a reduction in total spending, not to an increase in employment. B. Investment spending is not very strongly influenced by the rate of interest. C. Prices and wages are simply not flexible downward in modern capitalistic economies. D. Saving in modern economies depends largely upon the level of disposable income and is little influenced by the rate of interest.