One key assumption of the classical model is
A. wages are sticky.
B. government spending plays a major role.
C. prices are sticky.
D. money illusion cannot fool workers.
Answer: D
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When cost-push inflation starts, real GDP ________ and the price level ________
A) decreases; falls B) does not change; falls C) decreases; rises D) does not change; does not change E) increases; falls
Chad's income went from $1000 per week to $1500 per week. As a result he increased his consumption of steak from 1 pound a week to 3 pounds a week. Based on his consumption patterns, the income elasticity of steak for Chad is
A) 2.50. B) -.50. C) .50. D) -1.50.
If dairy farmers use automatic milking machines instead of milking by hand, which economic question does their decision answer?
a. What to produce? b. How to produce? c. For whom to produce? d. Who has a comparative advantage in milking? e. What is the price of milk?
If a pair-wise majority vote was held, the voters' preferences are shown in the table, and Abby is setting the agenda for votes, which pair will she put up for vote first?
A. Public zoo and public parks
B. Public transportation and public zoo
C. Public parks and transportation
D. It will not matter, as it will not affect the outcome of the voting.