The hands-off view of the classical school rests on which of the following two simple propositions about markets?
a. Demand creates its own supply and markets are basically competitive.
b. Industrial policy is inevitable and all prices are flexible.
c. Market failure occurs and prices are rigid.
d. Wages are sticky downward and market failure is inevitable.
e. Markets are basically competitive and prices are flexible.
E
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According to this Application, in the year 2075, the portion of GDP devoted to spending on Social Security, Medicare and Medicaid is expected to be
A) significantly less than the share of GDP devoted to these programs today. B) roughly equal to the total amount of GDP today. C) greater than the consumption spending component's share of GDP in 2075. D) larger than total federal spending's share of GDP today.
The gross domestic product is the
A) the value of all wealth in an economy. B) the value of all goods and services sold to other nations in a year. C) the market value of all final goods and services produced in an economy in a year. D) the market value of all intermediate goods and services produced in an economy in a year.
The introduction of human capital to the Solow neoclassical growth model reduces the significance of the contribution of ________ to increases in per capita income
A) K B) L C) K and L D) None of the above.
Assume the price of pizza decreases. As a result, your real income increases and you increase the quantity of pizza purchased each month. This is an example of the:
a. substitution effect. b. income effect. c. revenue effect. d. consumer price effect.