A key component of the Keynesian model is that
A) people are not fooled by money illusion. B) prices are flexible.
C) prices are sticky. D) wages are flexible.
C
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Classical economists believe that in the short run
A) money neutrality exists and prices adjust rapidly. B) money neutrality does not exist and prices adjust rapidly. C) money neutrality exists and prices do not adjust rapidly. D) money neutrality does not exist and prices do not adjust rapidly.
The marginal cost of Alexa's Guide to Street People and Their Pets is constant at $5 . Alexa sells 5,000 copies per year at $20 per copy. She would like to increase readership and hold total profit constant. If the price goes to $15, how many copies must she sell?
a. 10,000 b. 9,000 c. 7,500 d. 6,000
Political candidates often hold fundraisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Does this transaction benefit both parties?
A) No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend. B) Yes, it was a voluntary exchange that benefited both parties. C) No, Wendy paid too much for four dinners. D) Yes, but only if the dinners served actually cost $1,000 each.
What accounts for differences in living standards between rich and poor countries today?
What will be an ideal response?