One problem with a cost plus incentive fee procurement contract is _____
a. it requires clearly defined output that is not really malleable
b. it almost always leads to higher costs
c. firms have a strong incentive to invest in the most expensive technology to complete the project
d. firms have an incentive to misrepresent final costs
d
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The Keynesian short-run aggregate supply (SRAS) curve
A) shows that real Gross Domestic Product (GDP) will increase only if the price level increases. B) is horizontal. C) assumes a full-employment level of real Gross Domestic Product (GDP). D) does not reflect any changes in nominal Gross Domestic Product (GDP).
According to the theory of rational expectations,
a. workers' experience tells them that government action to lower unemployment will not affect inflation. b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects. c. policy goals can be achieved easily in the short run. d. workers' wage demands include anticipated inflation. e. expansionary monetary policy will lead to permanent interest rate declines.
Corrective taxes are typically advocated to correct for the effects of
a. positive externalities. b. negative externalities. c. patents. d. All of the above are correct.
If the wage rate rises and there is a net decrease in the use of capital by a firm
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects were equal. D. there is no way to determine the relative strengths of the output and substitution effects.