Describe one important criticism of Rostow's stages of economic growth theory
What will be an ideal response?
The stages are only necessary and not sufficient conditions, savings is too aggregate
a measure, the theory does not take into account the constraints of the international economic order, and there are counter-examples such as Argentina.
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How does the natural rate hypothesis relate to the AS-AD model?
What will be an ideal response?
Noise traders
A) tend to lose money on stock trades, but help to stabilize the market. B) tend to make higher returns than do "buy-and-hold" investors. C) create additional risk in the market by increasing price fluctuations. D) trade only when they have inside information.
Suppose there are 100 consumers with identical individual demand curves. When the price of a movie ticket is $8, the quantity demanded for each person is 5 . When the price is $4, the quantity demanded for each person is 9 . Assuming the law of demand holds, which of the following choices is the most likely quantity demanded in the market when the price is $6?
a. 700 b. 1,200 c. 400 d. 1,000 e. 100
Which one of the following will cause velocity to increase?
a. a decrease in interest rates b. increasing the efficiency of the payments system c. switching from weekly to monthly payroll checks d. an increase in the money supply