Which of the following statements is false?
A) Keynes believed that monopolistic elements in the economy will prevent immediate price declines.
B) Keynes believed that during periods of high unemployment, labor unions will prevent wages from falling fast enough to restore full employment.
C) Keynes believed that interest rate flexibility will ensure that saving is equal to investment.
D) Keynes did not believe in Say's law.
C
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Suppose Jack just booked a ticket to fly home to see his family for Thanksgiving. When he purchases the ticket, he decides to purchase travel insurance that allows him to get a full refund on his ticket if he's too sick to travel. Knowing this, Jack doesn't bother to take care of himself in the weeks leading up to the trip, reasoning that if he ends up being too sick to travel, then he can always get a full refund. Jack's failure to take care of himself in the weeks leading up to his trip is an example of:
A. a positional externality. B. the lemons model. C. moral hazard. D. adverse selection.
The scientific method, on which economics rely, consists of several elements, including: (check all that apply)
a. observing real-world behavior and outcomes and formulating a law based on said observations b. continuing to test the hypothesis against facts. c. observing real-world behavior and outcomes and formulating a hypothesis based on said observations d. accepting, rejecting, and adjusting a hypothesis.
The Gini coefficient for the United States from 1967 to 2016 shows
A. a decline over time in the trade-off between unemployment and inflation from 1967 to 2016. B. increased income inequality over time from 1967 to 2016. C. a weaker relationship over time between unemployment and inflation from 1967 to 2016. D. a closer relationship over time between job openings and the unemployment rate from 1967 to 2016.
Refer to the below graph of a representative firm in monopolistic competition. If curve (2) represents ATC and line (3) represents demand, then we can conclude that the industry:
A. Has positive economic profits
B. Is in long-run equilibrium
C. Will contract in the long run
D. Is not maximizing profits