The goods market adjusts to an equilibrium right at the point of the Keynesian cross. Why?
a. At that point, the Keynesian theory of sticky prices
b. At only that point, total spending is equal to total production.
c. At only that point, consumers are fully satisfied and firms have maximized profits.
d. At only that point, the unemployment rate is zero and workers need not seek higher wages.
Ans: b. At only that point, total spending is equal to total production.
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In the loanable funds market, what will change to eliminate a shortage of loanable funds and how is the shortage eliminated?
What will be an ideal response?
For a good whose production creates an external cost, the efficient quantity of output is
A) where the market demand curve and the market supply curve intersect. B) where the marginal social cost curve and marginal benefit curve intersect. C) as low as possible. D) zero. E) the amount of production so that the marginal social benefit exceeds the marginal social cost by as much as possible.
Which one of the following is based on the idea that the marginal utility of income diminishes as income increases?
a. Progressive taxation b. Capital controls c. Minimum wages d. Price controls e. Employee compensation regulations
The urban consumers that the CPI is based on does not include:
A. persons in prison. B. the unemployed. C. the retired. D. the CPI does not include any of these.