Those who favor passive policymaking argue that all of the following exist EXCEPT
A. pure competition is typical.
B. the trade off between inflation and unemployment is not stable in the short run and is non-existent in the long run.
C. aggregate demand shocks can influence real Gross Domestic Product (GDP) and unemployment.
D. perfectly flexible wages and prices.
Answer: C
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What is meant by the term technological spillover?
What will be an ideal response?
Identify the correct statement
a. Firms under monopolistic competition face inelastic demand curves. b. Firms under monopolistic competition produce and sell products that are complements. c. Firms under monopolistic competition can enter or leave the market with ease in the long run. d. Firms under monopolistic competition act interdependently.
X-inefficiency is said to occur when a monopolist's:
A. Average cost is greater than the minimum possible average cost at a given output level B. Marginal costs are greater than the minimum possible total costs of producing the output C. Total costs are greater than the minimum possible average costs at a given output level D. Short-run costs of producing any output are greater than the long-run costs
Refer to the diagram in which T is tax revenues and G is government expenditures. All figures are in billions. In this economy:
A. tax revenues and government spending both vary directly with GDP.
B. tax revenues vary directly with GDP, but government spending is independent of GDP.
C. tax revenues and government spending both vary inversely with GDP.
D. government spending varies directly with GDP, but tax revenues are independent of GDP.