Economist B believes that the economy can get stuck in a recessionary gap. This economist most likely believes that
A) wages and prices are flexible.
B) wages and prices are inflexible downward.
C) government may need to enact contractionary fiscal policy to move the economy out of a recessionary gap.
D) the economy is self-regulating.
E) none of the above
B
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The optimal level of water and air quality
a. is zero, which is a pollution-free environment b. occurs when the marginal private cost of air quality equals its marginal social cost c. is greater if the marginal social cost curve of air quality shifts downward d. occurs when all negative externalities are eliminated e. eliminates the common pool problem
Recall the Application about the behavior of prices in retail catalogs to answer the following question(s). In the Application, findings by Anil Kasyap showed that even though the catalogs listed in the Application were reissued every six months, the prices which were tracked in these retail catalogs:
A. were typically fixed for a year or more. B. changed every month. C. tended to fall during periods of high inflation. D. were not listed due to low rates of inflation.
Accounts receivable loans provided by finance companies provide firms with:
A. start-up capital. B. the ability to turn a relatively illiquid asset into liquidity. C. the ability to turn a liability into an asset. D. inventory loans.
For choice sets emerging from "exogenous" income, the budget line will shift parallel whenever both prices change by the same percentage.
Answer the following statement true (T) or false (F)