If markets are left to their own devices, the ________ a good or service is desired by buyers, the ________ its price will be
A) more; higher
B) more; lower
C) less; higher
D) less; more unstable
A
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Nonactivists believe that ________
A) there is a very rapid self-correcting mechanism since prices and wages are very flexible B) lags to policy implementation are so long that even the "correct" policies may lead to undesirable consequences C) policy interventions should take place less frequently than what Keynesians advocate D) all of the above E) none of the above
A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is
A) a service because the waitress carried it instead of making it. B) a good, but not an economic good because there is no price charged for the wine. C) a nongood because there is no price charged for the wine. D) an economic good because wine is produced with scarce resources, even if it is free to you.
In which of the following ways does government affect the consumption component of planned aggregate expenditures?
a. Through net taxes, which change disposable income b. By purchasing goods and services, which increase consumption c. By using subsidies to encourage firms to invest d. By reducing the interest rate to encourage firms to invest e. By producing public goods
The Phillips curve shows: a. the relationship between the interest rate and the inflation rate
b. the relationship between the inflation rate and the rate of unemployment. c. the relationship between the unemployment rate and the level of real GDP. d. the relationship between the growth rate and the inflation rate. e. the relationship between the rate of unemployment and the growth rate.