Economic theory provides insights into the range of possibilities for cost relationships. Studies such as those by Blinder et al. provide insights into where, within that range, many firms operate
Thus, there is no real conflict between theory and reality, as some people might try to claim. Indicate whether the statement is true or false
TRUE
You might also like to view...
Suppose the government wants to reduce the illegal importation of exotic animals used as pets and tries to achieve this goal by interrupting the supply of illegally imported exotic animals
If the demand for these animals is highly elastic, this government effort will result in A) a small reduction in the quantity of exotic pets demanded. B) a large reduction in the quantity of exotic pets demanded. C) no change in the quantity of exotic pets demanded. D) an increase in the quantity of exotic pets demanded.
"Crowding out" refers to the decrease in ________ that may result from an increase in government spending
A) private investment B) imports C) private saving D) all of the above E) none of the above
Aggregate demand equals: a. C + G + I + EX
b. C + G + I + EX + IM. c. C + G + I – EX + IM. d. C + G + I + EX – IM.
If the Fed wanted to expand the money supply as part of an antirecession strategy, it could
a. increase the interest rate paid on excess reserves encouraging banks to extend more loans. b. decrease the interest rate paid on excess reserves encouraging banks to extend more loans. c. decrease the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans. d. increase the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans.