Which of the following leads to a fundamental difficulty for stabilization policy?
a. Time lags in policy decisions
b. Presence of shock absorbers in the economy
c. Absence of data on the effectiveness of policy measures
d. Existence of self-correcting mechanism
a
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Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose that Teddy's marginal utility per dollar from cookies exceeds that from hot chocolate. Teddy can make himself better off if he buys
A) more cookies and less hot chocolate. B) fewer cookies and more hot chocolate. C) an equal amount of cookies and hot chocolate. D) only hot chocolate.
How can firms survive in the long run if mandatory retirement is illegal and if firms are stuck with older workers whose productivity might technically have fallen over time?
What will be an ideal response?
If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:
A. less pizza to be sold at a higher price. B. more pizza to be sold at a higher price. C. less pizza to be sold at a lower price. D. more pizza to be sold at a lower price.
The short-run aggregate supply line is:
A. upward sloping. B. downward sloping. C. horizontal at the current rate of inflation. D. vertical at the economy's potential output.