Which of the following arguments is typically associated with classical economists?
A) A market economy is self-correcting and thus will not remain in a recession indefinitely
B) A market economy has stable prices and thus is usually free from inflation
C) A market economy requires a strong government to ensure that the market meets the needs of the people
D) A market economy needs only moderate assistance from the government to avoid an extended recession
E) A market economy eventually results in monopolies in both the input and output markets
Ans: A) A market economy is self-correcting and thus will not remain in a recession indefinitely
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Which of the following statements best describes the changes in federal spending of the US economy from 1939 to 1949?
a. Between 1939 and 1944 military expenditures increased substantially and civilian-related expenditures remained about the same. b. Between 1939 and 1944 both military and civilian-related expenditures increased substantially. c. Between 1939 and 1944 the production possibilities frontier for military and civilian-related expenditures shifted out. d. Between 1944 and 1949 military expenditures decreased substantially and civilian-related expenditures returned to 1939 levels.
If Japanese real interest rates fall relative to real interest rates in the U.S., the yen will likely appreciate and the dollar will likely depreciate
Indicate whether the statement is true or false