"The market is not a self-regulating mechanism because prices are not flexible and nothing ensures that planned leakages will be offset by planned injections. To bring the economy out of depression and end high unemployment, some way of stimulating aggregate demand is required. This can be best achieved by a combination of government deficit spending and regulation of tax rates.". Which school of
thought does this statement best represent?
a. Utopian economics
b. Monetarist economics
c. Classical economics
d. Keynesian economics
e. Marxist economics
d
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Refer to Figure 10-6. A change in the price of candy only is shown in
A) Panel A. B) Panel B. C) Panel C. D) none of the above panels.
In an open economy, the law of one price implies that
A) the domestic economy may have a comparative advantage in only half the goods it produces. B) perfect competition holds in all domestic markets. C) purchasing power parity should hold. D) the nominal exchange rate should equal one.
Who owns the Fed?
a. the federal government b. the 50 state governments c. the District Federal Reserve Banks d. it has no ownership, which is why it is called independent e. member banks
An early frost in the vineyards of Napa Valley would cause a(n)
a. increase in the demand for wine, increasing price. b. increase in the supply of wine, decreasing price. c. decrease in the demand for wine, decreasing price. d. decrease in the supply of wine, increasing price.