Answer the following statements true (T) or false (F)
1) In the theory of coordination failures, shifts of the nation's long-run aggregate supply curve are
the main cause of business cycles.
2) The real-business cycle theorists see aggregate supply as the "active" factor in causing
business cycles and aggregate demand as a "passive" factor.
3) The "real" factors in the real-business-cycle theory include resource availability and
technology.
4) The idea of coordination failures suggests the possibility of less-than-desirable price-level and
real-output equilibriums in the economy.
1) F
2) T
3) T
4) T
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Between 1965 and 1972, eight major pieces of consumer-protection legislation were enacted. This burst of legislative activity was largely driven by
a. increased public fears following the thalidomide tragedy. b. public outcry following a series of steamboat explosions. c. a general lack of faith in the market. d. widespread support for the "Reagan Revolution.".
At high levels of interest, borrowers will borrow ____ and suppliers will supply ____.
A. more; less B. less; more C. less; less D. more; more
How is investment defined as an economic concept?
A. Investment is primarily the sum of expenditures by businesses on new capital goods that will yield a future stream of income. B. Investment is primarily the market value of all equipment, buildings, and inventories held by corporations, partnerships, and proprietorships. C. Investment is primarily the market value of all shares of stock held by the public. D. Investment is primarily the portion of your savings held in an interest-earning account.
The Cournot model specifies how two firms in an oligopoly compete in terms of quantity. Briefly describe how the outcome of Cournot oligopoly competition relates to the outcomes of perfect competition and monopoly in terms of output and market efficiency/inefficiency. Can you be more precise about the relation between Cournot, monopoly, and perfectly competitive outputs if you know that demand is linear and marginal costs are constant? Explain.
What will be an ideal response?