One criticism of the new classical model is that it does not have an adequate explanation for
a. rising prices and output.
b. short-run effects of monetary policy on output.
c. how optimizing individuals form their expectations.
d. the Great Depression.
e. both c and d.
D
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Suppose that, instead of taking this test, you could either have worked and earned income or partied and had a pleasurable time. Your opportunity cost of taking the test is the
A) forgone work. B) forgone party. C) forgone working and partying. D) forgone working or partying, depending on which was your next best choice. E) test because you are taking it.
Interest rate fluctuations
A) are usually not considered to be of much importance and are largely ignored by the Fed. B) have the paradoxical effect of increasing the rate of economic growth. C) make it difficult for households and firms to plan for the future. D) have largely been eliminated by the Fed during the past two decades.
This factor contributes to the winner's curse
a. your estimate of the value of the object was not the most optimistic b. your bid was not the highest c. there were not many other bidders you had to beat out d. you shaded your bid a lot
When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures
a. capital investment. b. investment in human capital. c. business consumption expenditures. d. personal saving.