Answer the following statements true (T) or false (F)
1. Mainstream economists identify wage-price rigidities as one cause of economic instability.
2. Mainstream economists believe that economic instability is primarily due to unexpected changes in consumer spending.
3. The mainstream view is that macro instability is caused by the volatility of the money supply which constantly shifts the aggregate demand curve around.
4. Mainstream economists think that the best way to stabilize the economy is to shift aggregate supply.
5. Monetarists argue that government policy interference in the economy is the primary cause of macroeconomic instability.
1. T
2. F
3. F
4. F
5. T
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Because of the monopoly power that comes with being the only firm to produce a product, it is always more efficient to have multiple firms in an industry.
Answer the following statement true (T) or false (F)
If an economy experiences high interest rates and high unemployment, the ISLM framework predicts that ________ policy has been too ________
A) fiscal; expansionary B) fiscal; contractionary C) monetary; expansionary D) monetary; contractionary
Savings accounts have specific maturity dates
a. True b. False Indicate whether the statement is true or false
Use the following general linear supply function:Qs = 40 + 6P - 8PI + 10F where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. Suppose PI = $40, F = 50, and the demand function is Qd = 700 - 6P , then if government sets a price of $30 what will be the result?
A. a shortage of 120 B. a surplus of 120 C. a surplus of 160 D. a shortage of 160