Because markets may not clear for several months or even several years, the classical model
a. is no longer considered valuable by mainstream economists
b. has no value when explaining a situation where excess supply exists
c. is irrelevant to any discussion of a market in which excess demand exists
d. does a better job of explaining short-term fluctuations than long-run growth
e. does a better job of explaining long-run growth than short-run fluctuations
E
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The net effect of savings of the asset substitution, induced retirement, and bequest effects combined is that people save ________they would have without Social Security.
A. slightly less than B. the same as C. more than
The economic system that is generally considered to be the most efficient at answering the What to produce and the How to produce questions is the:
a. market economy. b. command economy c. soviet economy. d. traditional economy.
A cut in government spending will cause a(n) _________ in aggregate demand, and a decrease in the discount rate will cause a(n) _______ in aggregate demand.
a) increase; decrease b) increase; increase c) decrease; decrease d) decrease; increase e) none of the above
Engineers for The Giffen Record Company determine that a 30% increase in all compact disc inputs will cause a larger percentage increase in output. Assuming that input prices remain constant, you correctly deduce that such a change in inputs will cause ________ as output increases.
A. average costs to remain constant B. marginal costs to increase C. average costs to decrease D. average costs to increase