If all the assumptions of perfect competition hold, the result is an efficient, or Pareto optimal, allocation of resources. What is necessary to prove this?
What will be an ideal response?
To prove this statement, it is necessary to show that resources are allocated efficiently among firms, that final products are distributed efficiently among households, and that the system produces what people want.
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According to your text, the so-called "Superbowl Effect"
A) is an example of a mere statistical correlation. B) is an example of correct cause-and-effect reasoning. C) is a sound discovery in economic theory. D) is based upon a false set of facts.
Explain why bond prices and interest rates are inversely related.
What will be an ideal response?
According to new Keynesian theory, if policy is correctly anticipated, increases in aggregate demand will stimulate the economy to higher levels of Real GDP and lower levels of unemployment in
A) the short run or the long run. B) neither the short run nor the long run. C) the short run, but not in the long run. D) the long run, but not in the short run.
Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if ?=0.25 then growth of output can be estimated to be:
A. 6.00%. B. 4.00%. C. 4.75%. D. 4.25%.