Both the classical and monetarist models assume all of the following except
a. perfectly flexible prices.
b. perfectly flexible wages.
c. perfect information.
d. vertical aggregate supply curve in the long-run.
C
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Credibility is important to successful anti-inflationary policy in ________
A) new Keynesian theory B) traditional Keynesian theory C) real business cycle theory D) post classical theory
The demand curve for foreign exchange is
a. downward sloping. b. upward sloping. c. horizontal because no individual country can influence the price of foreign exchange. d. dependent on the supply of foreign exchange.
According to the process of creative destruction, at first the entrepreneur will be able to sell her product for
a. a low price because it is not well known. b. a high price because there is no competition. c. a fair price because these are contestable markets. d. at a price of zero until the market is created.
If a business firm continues to sustain losses, what usually happens in a market economy?
What will be an ideal response?