According to Keynes, the classical model could not explain
A. periods of rising unemployment.
B. a recession or depression.
C. a long-term economic decline.
D. periods of rising interest rates.
Answer: C
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If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save less because, as they reason it, "the government is saving for me," you would attribute this to the
A. asset substitution effect. B. induced retirement effect. C. slovenly effect. D. bequest effect.
Fill out the table and answer the question below. 
The average product of labor when 4 units of labor are employed is
A. 22. B. 19. C. 16. D. 20.
Consider the following simple regression model: y = 
0 + 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?
A. Cov(z,u) > 0 B. Cov(z,x) > 0 C. Cov(z,u) = 0 D. Cov(z,x) = 0
In the long run, the expansion path is
A) horizontal. B) vertical. C) diagonal. D) Not enough information.