If you were a Keynesian, you would
a. accept the countercyclical policy of doing nothing, that is, allow market forces to work
b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment
c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment
d. focus on increasing aggregate demand in order to stimulate the economy
e. argue in favor of supply side economics
D
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Industry Y is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y
After all adjustments have taken place, we would expect the equilibrium price in industry Y to: A) decrease and the number of firms to increase. B) decrease and the number of firms to decrease. C) increase and the number of firms to increase. D) increase and the number of firms to decrease.
The base year matters for the computation of real GDP because
A) otherwise we cannot compute growth rates. B) relative prices can change over time. C) it allows an international comparison of GDP. D) it establishes a target for macroeconomic policy.
Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. Her opportunity cost of going to the beach is:
A. the $12 she spent on the umbrella, food and drinks. B. the value she places on seeing the movie. C. only $0 because she would have spent $12 to go to the movie. D. the value she places on seeing the movie plus the $12 she spent on the umbrella, food and drinks.
Countries that typically run a trade surplus are:
A. China, Germany and the US. B. China, Japan, and the US. C. China, Germany, and Japan. D. Japan, Germany and the US