Which of the following economic theories take into account the rational expectations of people in the economy?
a. Traditional Keynesian economic theory
b. Monetarist economic theory
c. New classical economic theory
d. Classical economic theory
e. New Keynesian economic theory
c
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"Any additional increases in government spending should be for defense," is ________ statement about ________ policy.
A. positive; fiscal B. normative; monetary C. normative; fiscal D. positive; monetary
The goal of expansionary fiscal policy is to increase
A. aggregate supply. B. real GDP. C. unemployment. D. the price level.
When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they can achieve long-run economic profit similar to
A) perfect competition. B) monopoly. C) monopolistic competition. D) non-colluding oligopolies. E) the firms in regulated industries.
You start your own business selling boating equipment. To start the business you sell 5,000 shares of stock at $50 each. This year the revenues from the business are $300,000, and total costs of operating the business are $200,000
All profits are paid out as dividends to the shareholders. If the current interest rate is 20%, what is the economic profit being earned by the shareholders? What will happen to the amount of economic profits earned if the interest rate decreases? Explain your answer.