The supply-determined nature of output and employment is a crucial feature of
a. the Keynesian theory.
b. the classical system.
c. monetarism.
d. the rational expectations model.
B
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List and explain the three fundamental economic questions that must be answered by all economic systems
What will be an ideal response?
Profits resulting from luck can be distinguished from profits attributable to shrewd predictions by
A) calculating the opportunity cost of earning the profits. B) comparing the profits with interest rates. C) finding out whether they lead to reduced revenue or increased costs. D) no known empirical test. E) whether or not they were generally anticipated.
If the People's Bank of China adopted a flexible exchange rate policy
A) the U.S. dollar would depreciate. B) the U.S. dollar would appreciate. C) the yuan would depreciate. D) the yuan-U.S. dollar exchange rate would rise.
The earnings gap between better- and lesser- educated workers has held steady
Indicate whether the statement is true or false