Most economists believe that classical economic theory is a good description of the world in
A. the long run, but not in the short run.
B. the short run, but not in the long run.
C. the short run and in the long run.
D. neither the short nor long run.
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Business cycles
A. are explained mostly by fluctuations in corporate profits.
B. no longer are very important due to government policy.
C. are fluctuations in real GDP and related variables over time.
D. All of the above are correct.
People will spend less if the price level
A. rises, making the dollars they hold worth more.
B. rises, making the dollars they hold worth less.
C. falls, making the dollars they hold worth more.
D. falls, making the dollars they hold worth less.
Which of the following shifts aggregate demand right?
A. The price level rises.
B. The price level falls.
C. The money supply rises.
D. Both a and b are correct.
The long-run aggregate supply curve shifts right if
A. Congress raises the minimum wage substantially.
B. unemployment insurance benefits are made more generous.
C. immigration from abroad increases.
D. All of the above are correct.
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