Both the new classical and new Keynesian models had in common the belief that
A) in the medium run, output returns to its natural level.
B) output is always at its natural level.
C) in the short run, output would likely deviate from its natural level.
D) none of the above
A
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Explain why each of the following is not a valid argument for protection
(a) patriotism (b) fair play (e.g. level international playing fields) (c) preservation of jobs
The zero lower bound on the nominal interest rate arises because
A) if the nominal interest rate were less than zero, an arbitrage opportunity would exist. B) bank profits must be zero. C) the government would not allow it. D) the economy would crash.
In a perfectly competitive labor market
a. all firms are wage takers b. all firms are wage searchers c. all firms sell their output at a constant price d. none of the firms that demand labor can be monopolists e. some firms may be able to influence the wage rate as long as most firms cannot
If TruLite's factory workers receive an hourly wage, described by the equation; Compensation = $5.00 + .10Q, where Q is the number of light switches installed per hour, then:
A. the employee can remain completely risk-averse. B. there are no compensating differentials. C. output becomes a subjective measure of performance. D. the employee must accept risk of production variability.