Proponents of ISI assumed that governments
A) were capable of identifying and correcting market failures.
B) were capable of identifying and correcting the excesses of economic populists.
C) should enact orthodox stabilization plans.
D) could control the terms of trade.
A
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Given the assumptions of the classical model
A) the economy will often experience recessions and expansions. B) expansion will be the normal condition, but recessions will often be severe and require government intervention. C) the macroeconomy is erratic, and problems will often be increased over time. D) the market is a self-correcting mechanism.
In the short run, movement toward a fixed production possibilities curve comes from
A. Increased use of our productive capabilities. B. An increase in population. C. Shifting the aggregate demand curve to the left. D. Expansion of the production possibilities curve.
Which of the following statements best reflects the concept of present value?
A. "The savings bond I bought five years ago is now worth $1,000." B. "My $100 savings bond will be worth $200 in 10 years." C. "You owe me $500, due at the end of the year, but I will reduce your debt to $450 if you pay me now." D. "The $5,000 in my savings account is worth less today than five years ago because of inflation."
Which of the following does not describe a characteristic of short-term economic fluctuations?
A. Expansions and recessions are irregular in length and severity. B. Durable-goods industries are less sensitive to short-term fluctuations than service and non-durable industries. C. Expansions and recessions are felt throughout the economy. D. The unemployment rate rises during recessions.