Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left.
b. Start the analysis in the real goods market with aggregate demand shifting to the right.
c. Start the analysis in the real credit market with demand for real credit shifting to the left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.
.E
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Different public goods can have different sized sharing groups, so efficiency would dictate _____
a. that only one national government is necessary b. that public goods be provided by the federal government and the states deal with externalities c. one world government for most pure public goods d. different public goods supplied at different levels of government
The unemployment resulting from wage rigidity and job rationing is called:
A. the natural rate of unemployment. B. the discouraged-worker effect. C. structural unemployment. D. insiders versus outsiders.
The price elasticity of demand is generally negative to reflect the indirect relationship between the quantity demanded of a good and its price.
Answer the following statement true (T) or false (F)
Many theaters sell empty seats at a deep discount just before show time. What economic concept is displayed by this behavior?
A. Consumer demand B. Sunk costs C. Price optimization D. Thinking at the margin