Suppose that, as expected, aggregate demand in the economy sharply declines. New classical economists say that the price level will _____________ and real output will ____________
A. fall; remain constant
B. fall; fall
C. remain constant; fall
D. remain constant; rise
A. fall; remain constant
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What will be an ideal response?
Full employment is the rate of employment that results when:
a. all the labor resources of the economy are employed full time. b. cyclical unemployment has reached its maximum. c. everybody who wants a job can find one. d. only frictional and structural unemployment are present.
An auxiliary regression refers to a regression that is used:
A. when the dependent variables are qualitative in nature. B. when the independent variables are qualitative in nature. C. to compute a test statistic but whose coefficients are not of direct interest. D. to compute coefficients which are of direct interest in the analysis.
According to the representative heuristic, people are more likely to believe that something belongs to a given category if:
A. people believe that they themselves are members of the category. B. it shares characteristics with the stereotypical members of that category. C. people can recall other members of the category. D. it is unlike the stereotypical members of that category.