Gordon argues that individual workers and firms prefer long-term contracts, but that such contracts
A) raise the costs of doing business, a macroeconomic externality.
B) insure that output alone is adjusted as AD changes and therefore, such contracts impose high costs of output and employment instability on society.
C) insure that the price level alone is adjusted as AD changes and therefore, such contracts impose high costs of output and employment instability on society.
D) insure a macroeconomic externality, rigid unemployment.
B
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The marginal propensity to save is:
a. the change in saving divided by the change in disposable income. b. the change in disposable income divided by the change in saving. c. saving divided by disposable income. d. disposable income divided by saving. e. saving divided by consumption.
States in the international arena have the right to cite international law and then take justice into their own hands. This is called
a. blended enforcement. b. self-enforcement. c. diplomatic pressure. d. economic sanction.
Which of the following generalizations is derived from the economist's framework?
A. Government regulations have the same impact whether they are designed on the basis of cost/benefit analysis or were developed as a reaction to real-world events. B. Policies that relieve immediate suffering often have the best long-run consequences. C. Sound policies often are prevented by individuals' self-interest-seeking activities. D. Politicians always take too long to enact regulations because they must wait for economic advisors to perform a cost/benefit analysis.
One of the principles behind the concept of the circular flow is that
A. the seller of goods receives exactly the same amount that the buyer spends, but the seller of resources receives less than the buyer spends. B. in every economic exchange, the seller receives less than the amount that the buyer spends. C. in every economic exchange, the seller receives exactly the same amount that the buyer spends. D. in exchange involving products, the seller receives less than the amount the buyer spends, but in resource markets the seller receives more than the buyer spends.