According to Gordon, a major problem with Keynes' "rigid nominal wage" theory of the business cycle is
A) a horizontal LM curve.
B) it is not a market clearing theory.
C) falling real wages are not countercyclical with business activity or Y.
D) None of the above.
C
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An increase in ________ increases potential GDP and ________ aggregate supply
A) the money price of oil; decreases B) the money wage rate; decreases C) the money wage rate; increases D) technology; decreases E) technology; increases
Refer to the above figure. Ajax and Greenco are oligopolists. Above you are given the payoff matrix for the two firms giving the payoff associated with different pricing strategies
What is the best strategy for Greenco if Ajax decides on charging a high price? A) high price B) low price C) There is no best strategy. D) Not enough information is given to determine the best strategy.