The assumption of wage and price flexibility lead classical economists to conclude that business cycle fluctuations are short-term in nature
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to Figure 9-3. If there was no quota, how many pounds of peanuts would domestic consumers purchase?
A) 10 million B) 28 million C) 34 million D) 40 million
If a firm has no ______ costs, then the profit from shutting down is zero.
A. fixed B. variable C. opportunity D. sunk
The demand curve of a monopolistically competitive firm
A) is horizontal because the firm must cut its price to sell more. B) is perfectly elastic. C) is downward-sloping because it sells an identical product. D) is downward-sloping because it must cut its price to sell more.
An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective?
A. $6 billion B. $9 billion C. $12 billion D. $16 billion