The Laffer curve is representative of which of the following schools?
a. Supply-side school.
b. Rational expectations school.
c. Keynesians.
d. Neo-Keynesians.
e. Classical school.
a
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According to the original Keynesian model, there would be counter-cyclical movements of the real wage rate in response to changes in aggregate demand because
A) firms react to nominal wages and workers respond to real wages. B) firms react to real wages and workers respond to the expected real wage. C) firms are on their labor demand curve and workers are off their labor supply curve. D) firms are off their labor demand curve and workers are on their labor supply curve.
In contrast to perfect competition, in a monopolistically competitive industry:
a. new firms entering the market produce a good that is identical to the existing ones. b. new firms entering the market produce a completely different product. c. there are legal restrictions on the entry of new firms. d. new firms entering the market produce a close substitute, not an identical or standardized product. e. new firms are allowed to enter the industry but there are legal restrictions on their exit.
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.
Carlos can buy either sushi or eggrolls. If the prices of sushi and eggrolls triple and Carlos's money income doubles, we can deduce that Carlos's budget constraint will
A. shift out but remain parallel to the old one. B. shift in but remain parallel to the old one. C. swivel in so that the slope of the budget constraint is doubled. D. remain unchanged.