What is the difference between the Keynesian and rational expectations theories concerning the success of stabilization policy?
The Keynesians believe that government can affect real GDP and employment. The rational expectationists believe that government stabilization policies have no effect on real GDP or employment. The only effect is on the price level.
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Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $16 . What do you advise this firm to do?
a. Increase output. b. Decrease output. c. Shut down operations. d. Stay at the current output; the firm is earning a profit of $400. e. Stay at the current output; the firm is losing $200.
In the market for loanable funds, the supply curve:
A. represents savers. B. is downward sloping. C. reflects that more people will choose to save the lower is the interest rate. D. is made up of people who want to borrow funds.
Suppose the price elasticity of demand for oil is 0.1. In order to lower the price of oil by 20 percent, the quantity of oil supplied must be increased by.
A) 200 percent B) 20 percent C) 2 percent D) 0.2 percent.
Because it costs more to live in cities than it does to live in rural areas, the
A. true poverty rate is higher than the government reports it to be. B. poverty line is set too high in cities and too low in rural areas. C. poverty rate is overstated in cities and understated in rural areas. D. poverty line is set too low in cities and too high in rural areas.