Which of the following holds that business cycles are primarily due to changes in technology and does NOT invoke any monetary or demand-side forces?
A. the real business cycle theory
B. adaptive expectations hypothesis
C. rational expectations hypothesis
D. the efficiency wage theory
Answer: A
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Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 2%; scenario B has an average annual growth of 4%. The nation's real GDP would double in about
A. 36 years under scenario A, versus 18 years under scenario B. B. 36 years under scenario A, versus 9 years under scenario B. C. 18 years under scenario A, versus 9 years under scenario B. D. 25 years under scenario A, versus 12.5 years under scenario B.
Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Bob withdraws his $105 . If inflation was 7 percent during the year the money was deposited, then Bob's purchasing power has increased by 2 percent
a. True b. False Indicate whether the statement is true or false
All solutions to market failures in markets for public goods or common resources:
A. try to force the internalization of externalities. B. are not perfect, and total surplus cannot be maximized in these markets. C. need to be accepted by the affected parties to be effective. D. must be provided by the government.
Refer to the graph shown. Area B represents:
A. the loss of surplus by consumers resulting from a monopoly. B. consumer surplus redistributed to the monopolist. C. the loss of surplus by producers resulting from a monopoly. D. the cost to society of increasing output from Qm to Qc.