The industry most closely associated with perfect competition is
a. manufacturing.
b. banking.
c. mining.
d. farming.
d. farming.
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Keynesian policy:
A. refers to policies that actively shift aggregate demand in an effort to reach full employment. B. refers to fiscal policy. C. promotes spending more and taxing less to boost economic activity to potential GDP. D. All of these are true.
In the used pick-up truck market:
A. some of the predictions of the lemons model are observed some of the time. B. the lemons model accurately describes the market. C. none of the predictions of the lemons model are observed. D. there is no asymmetric information, and so the lemons model does not apply.
Suppose the economy is in equilibrium when there is a change in environmental policy that bans all pesticides and herbicides on farmland. We would expect to observe
A. a decrease in aggregate supply and an increase in aggregate demand. B. a decrease in both real output and the natural rate of unemployment. C. a decrease in real output and an increase in the price level. D. a decrease in real output and an increase in the natural rate of unemployment.
New Keynesian theory implies that which of the following reduces firms' incentive to adjust their prices?
A. a downward sloping aggregate demand curve B. menu costs C. the required reserve ratio D. none of these