If the economy were left on its own without the interference of government or the Fed, it would move toward an equilibrium rate of growth that would produce, with only minor interruptions, full employment without inflation. What school supports this view?
a. classical
b. Keynesian
c. monetarism
d. supply-side
e. neo-Keynesian
A
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Perfectly competitive firms are price takers because
a. each firm is too small compared to the market to be able to affect price b. one firm determines price and all other firms accept this price c. firms take the price that government determines d. firms must accept any price consumers offer them e. firms earn high profits by "taking" consumers
A decrease in the supply of a good will result in a rightward shift in the demand curve for the good
a. True b. False Indicate whether the statement is true or false
Which of the following would be most likely to cause the per capita income of less-developed countries to rise?
a. development of strong labor unions b. more rapid population growth c. investment expenditures that enhance the human capital of labor force participants d. an international minimum wage law
When the Fed raises the discount rate, it:
A. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. B. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. C. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. D. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.