Ms. Jones is a professor at a university. She strongly supports the rational expectations theory. She is likely to believe that the only time active policy has an impact on aggregate output is when:
a. an expansionary policy is implemented.
b. a recessionary policy is implemented.
c. policy changes are unannounced
d. the economy has a recessionary gap.
e. the economy has an expansionary gap.
c
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Private markets tend to undersupply nonexcludable goods because of
a. individuals' incentives to be untruthful. b. overcrowding. c. free riding. d. dissipated rents.
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.
Janelle spends all of her income on songs from iTunes ($1 each) and applications ($5 each) for her iTouch. If she makes her best affordable choice, she purchases 20 songs and 4 applications, what is her income?
A) $40 B) $20 C) $30 D) $25
Why would the government create monopoly power by granting a firm a patent that prevents other firms from competing with the patent holder?