The “monopoly issue” is concerned with the fact that (a) monopolies will “charge what the traffic will bear” in order to maximize their profits. (b) monopolies will attempt to increase their profits by discriminating among their customers and charge prices that they are willing to pay, instead of charging one price. (c) monopolies will be […]
Which of the following factors are important in the determination of growth rates of output in the intermediate run? a. Variations in the rates of capital formation. b. Changes in population growth. c. Changes in money growth. d. All of the above. e. None of the above. ANSWER A
Regarding the stock market crash of 1929, evidence shows that (a) no one expected trouble in the stock market before the October 1929 crash. (b) there was doubt about the speculative heights of stock prices as they continued to rise and more money continued to pour into the market. (c) only active support by the […]
Evidence in favor the Keynesian model would be that: a. investment is not sensitive to changes in tax rates. b. labor supply is inelastic. c. the aggregate price level is positively correlated with income. d. all of the above. e. none of the above. ANSWER D
Early Keynesians concluded that the quantity of money was not important because they assumed a. low interest elasticity of money demand and high interest elasticity of the demand for output. b. high interest elasticity of money demand and low interest elasticity of the demand for output. c. high interest elasticity of money demand and high […]
During the decade of the 1920s, the distribution of income (a) became increasingly equal. (b) changed little or not at all. (c) became increasingly unequal. (d) may or may not have changed, but it is difficult to know because of lack of data. ANSWER (c)
The overall productivity crisis of the 1970s can be attributed, in part, to insufficient investment in research and development. Indicate whether the statement is true or false ANSWER TRUE
In the Monetarist model, a. monetary policy and not fiscal policy is the prime factor in aggregate demand movements. b. money demand is more volatile than in the Keynesian model. c. expectations are correct on average. d. aggregate supply is not the primary source of business cycles. e. both a and b. ANSWER A
A trade deficit can be financed by all of the following except a. a surplus in the capital account. b. a surplus in the official reserves transaction account. c. selling U.S. assets to foreigners. d. U.S. citizens buying foreign stocks and bonds. ANSWER D
Munn v Illinois (1877) was particularly important with regard to government regulation because it (a) upheld the traditional right of businesses to act freely without interference by government. (b) established the right of government to regulate any business that was deemed “clothed” in the public interest. (c) established the right of government to regulate any […]
