What is the difference between capital goods and consumer goods?
What will be an ideal response?
Capital goods are goods that will be used to produce other goods in the future. Consumer goods are goods that are used for current consumption.
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An economist who would most likely use active policy making would support which of the following conclusions?
A) Demand shocks have little or no short-run effects on real Gross Domestic Product (GDP) and unemployment. B) Pure competition is not typical in most markets. C) Price flexibility is common in most markets. D) Supply shocks explain most business cycles.
Explain the nature and consequences of asymmetric information for each of the following cases. What options are available in each instance to reduce the problem?
a. medical insurance b. issuance of credit cards c. professional athletes d. market for used appliances