According to the misperceptions theory, short-lived shocks may have long-term effects on the economy because of
A) multiplier effects.
B) propagation mechanisms.
C) accelerator effects.
D) automatic stabilizers.
B
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Production by Honda, a Japanese firm, in the United States is included in ________ GDP and production by Nike Corporation, a U.S. firm, in Vietnam is included in ________ GDP
A) U.S.; U.S. B) Japanese; Vietnamese C) U.S. and Japanese; U.S. and Vietnamese D) Japanese; U.S. E) U.S.; Vietnamese
The Volcker Disinflation (1980-1986 ) was costly in terms of output and unemployment. Would it not have been better to reduce inflation with a positive supply shock, rather than a negative demand shock?
What will be an ideal response?
Always Round Tire has a production function of Q = 300 L.75 K.5. If Always Round Tire doubles the size of its production facility-increasing L from 250 to 500 and K from 25 to 50 -what happens to the cost of production, even though we do not know the wages of labor or the price of capital?
What will be an ideal response?
Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $40 million, and bank deposits are $90 million. The money multiplier is equal to
A. 3.0. B. 4.0. C. 2.5. D. 5.0.