Positive statements are
a. prescriptive.
b. claims about how the world should be.
c. claims about how the world is.
d. made by economists speaking as policy advisers.
c
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A key component of the Keynesian model is that
A) people are not fooled by money illusion. B) prices are flexible. C) prices are sticky. D) wages are flexible.
Refer to Figure 14-8 Use the decision tree to determine whether Microsoft should deter Toshiba from entering the market for electronic book readers (e-readers). Assume that each firm must earn a 20% return on investment to break even
Explain Microsoft's decision process.
If Jamal successfully and completely internalizes a negative externality, it follows that
A. transaction costs are zero. B. his marginal private costs are equal to marginal social costs. C. information is asymmetric. D. information is symmetric. E. none of the above
Monetarists argue that an exogenous fall in investment spending leads to
A) declining real output. B) declining money supply. C) declining velocity. D) declining interest rates.