Which of the following is necessary for an economy to self-adjust fairly quickly, according to classical economists?
a) The use of monetary policy
b) A high unemployment rate
c) The use of fiscal policy
d) Flexible wages and prices
Answer: d) Flexible wages and prices
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Which of the following is true for a competitive buyer?
A) AE = ME B) AE > ME C) AE < ME D) AE greater than or equal to ME
Suppose Good A is a normal good. Which of the following will increase the demand for Good A?
A) an increase in the price of its substitutes B) a lower expected future relative price of A C) an increase in the price of its complements D) a decrease in income
Refer to the above graph. At price level P1:
A. the quantity of output supplied is equal to the quantity of output demanded. B. the quantity of output supplied is greater than the quantity of output demanded. C. the quantity of output supplied is less than the quantity of output demanded. D. the quantity of output supplied is constant.
If a candidate for political office was espousing a "pro-growth" agenda and was focused on universal and free college education, this would have its greatest impact on growth through which source?
A. An increase in economic freedom B. An increase in the number of workers C. An increase in the productivity of workers D. None of these