Which of the following is NOT an assumption of the classical model?
A. Pure competition exists.
B. Wages and prices are flexible.
C. Inflation will lead to money illusion.
D. People are motivated by self-interest.
Answer: C
Economics
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Which of the following has NOT been proposed as a possible economic solution to reducing the government deficit?
A) increasing taxes for everyone B) reducing expenditures C) increasing the number of entitlements D) increasing taxes for the rich
Economics
The term "open market operations" refers to the:
a. loan-making activities of commercial banks. b. effect of expansionary monetary policy on interest rates. c. operation of competitive markets in the banking industry as the result of deregulation. d. buying and selling of government securities by the Federal Reserve.
Economics