Samuelson and Solow reasoned that when aggregate demand was high, unemployment was
a. low, so there was upward pressure on wages and prices.
b. low, so there was downward pressure on wages and prices.
c. high, so there was upward pressure on wages and prices.
d. high, so there was downward pressure on wages and prices.
a
You might also like to view...
Which theory of the business cycle emphasizes initiating changes in aggregate supply?
A) the Friedman "fooling" theory B) the real business cycle theory C) the Keynesian theory D) the new classical theory
When the government pays for childhood vaccinations, it is
A. subsidizing an external benefit. B. using taxes to discourage an external cost. C. internalizing an external cost. D. using direct regulation to discourage an external cost.
You are hired by the Council of Economic Advisors (CEA) as an economic consultant. The Chairperson of the CEA tells you that she believes the current unemployment rate is too high. The unemployment rate can be reduced if aggregate output increases. She wants to know what policy to pursue to increase aggregate output by $500 billion. The best estimate she has for the MPC is 0.5. Which of the following policies should you recommend?
A. cut taxes by $200 billion and to increase government purchases by $200 billion B. cut taxes by $200 billion C. increase government purchases by $200 billion D. increase government purchases by $250 billion
Economist Jack Hirshleifer notes that, "Altruism economizes on the costs of policing and enforcing contracts." Since economics assumes that people act in a self-interested manner, what could he possibly mean?
What will be an ideal response?