At a trough in the business cycle, the macroeconomic equilibrium is ________ the level of potential real GDP
A) equal to
B) rising above
C) greater than
D) less than
E) None of the above answers is always correct because the relationship depends on whether the previous phase of the business cycle had been a recession or an expansion.
The table gives the aggregate demand and aggregate supply schedules for a nation.
D
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The goal of a gold standard is to
A) return money back to its natural state. B) shift wealth from the middle class to the rich. C) reduce uncertainty by limiting the power of the Federal Reserve to increase the amount of money in circulation. D) conserve on natural resources, such as pulpwood, used to make paper money.
Unit elastic demand occurs when
a. a one-unit increase in price leads to a one-unit decrease in quantity demanded b. a 1% increase in price leads to a one-unit decrease in quantity demanded c. price elasticity of demand is positive d. price elasticity of demand is exactly zero e. price elasticity of demand is exactly -1
When firms are faced with repeating games, such as the prisoner's dilemma, they:
A. are more likely to collude. B. are less likely to collude. C. will tend to act more like perfectly competitive firms. D. will be more likely to renege on agreements.
Which of the following is a measure taken by the government to internalize externalities?
a. Value Added Tax b. Income Tax c. Cap and trade d. Tariffs e. Deficit financing