The possibility that unanticipated policy changes are an important source of output fluctuations is most consistent with ________
A) traditional Keynesian theory
B) new Keynesian theory
C) real business cycle theory
D) institutionalist theory
B
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Refer to the table below. Suppose the profit for each unit of paper product is $2 and the profit for each unit of lumber is $5 and Big Oaks is producing the profit-maximizing quantity of lumber and paper products. If the profit from each unit of lumber increases from $5 to $6 and the profit for each unit of paper products does not change, to maximize profit, Big Oaks should produce a ________
proportion of lumber and produce ________ units of paper products and lumber.
Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amount of paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable proportions. The above table summarizes Big Oaks production possibilities from each harvested tree.
A) smaller; more
B) smaller; less
C) greater; less
D) greater; more
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.
Suppose when the price of shoe laces goes from $1 to $2 per pair, production increases from 95 million pairs to 105 million pairs per year. Using the mid-point method, the price elasticity of supply is:
A. 66 percent B. 10.5 percent C. 0.15 D. 6.28
According to the infant industry argument for trade protectionism:
A. trade barriers must be used to protect domestic workers. B. new industries need to be shielded from competition in the early stages of learning by doing. C. tariffs imposed to aid new industries should never be removed. D. new industries are capable of competing with established rivals.