Answer the following statements true (T) or false (F)
1) Economists believe that expectations have little impact on macroeconomic outcomes.
2) Shocks occur when actual events do not match expectations.
3) A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.
4) At the end of the summer driving season, the demand for gasoline typically declines. This is
an example of a negative demand shock.
1) F
2) T
3) T
4) F
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Which of the following accurately describes growth rates in the United States from 1900 to the present?
A) Growth rates have risen continuously from 1900 to the present. B) Growth rates rose until the 1970s, slowed until the 1990s, rose again until 2005, and then slowed again to the present. C) Growth rates rose until the 1970s and then fell until the present. D) Growth rates have fallen continuously from 1900 to the present.
Collusion is:
A. easy to maintain since firms always have an incentive to renege. B. difficult to maintain since firms rarely agree on the terms. C. easy to maintain since firms face similar cost curves. D. difficult to maintain since firms always have an incentive to renege.
Since sunk costs are incurred no matter what:
A. they are relevant in deciding how much to produce. B. they are essential in the profit-maximizing sales quantity formula. C. they can generally be ignored in making economic decisions. D. they are considered fixed costs.
In the long run, monopolistically competitive firms earn zero economic profits.
Answer the following statement true (T) or false (F)