Which of the following is the factor that leads to business cycles in the new classical business cycle theory?
A. a change in the growth rate of productivity
B. a change by the Fed in the growth rate of the quantity of money
C. a change in business confidence
D. an unexpected change in aggregate demand
Answer: D. an unexpected change in aggregate demand
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Describe how inflation can be costly even if it is anticipated
What will be an ideal response?
The basic principle that explains the demand for a factor of production is the
a. principle of marginal productivity. b. Hotelling principle. c. principle of opportunity cost. d. Ramsey pricing principle.
Oscorp Inc, a manufacturer of smartphones, is willing to receive $3,000 for each smartphone. The equilibrium market price is $4,000 per smartphone. Which of the following would be the best situation for Oscorp Inc?
a. Consumers being willing to pay $3,000 per smartphone b. Consumers being willing to pay $2,000 per smartphone c. The equilibrium market price changing to $4,500 per smartphone d. The equilibrium market price changing to $3,500 per smartphone
The marginal cost of a good or service
A) can be calculated from the marginal benefit of that good or service. B) decreases as more of the good or service is produced. C) can be derived from the production possibilities frontier. D) graphs as a positively sloped curve, so it cannot be derived from the production possibilities frontier, which is downward sloping. E) None of the above answers is correct.