From the mainstream perspective, instability in the economy is due to:
A. Price flexibility, and shocks to either aggregate demand or aggregate supply
B. Price stickiness, and shocks to either aggregate demand or aggregate supply
C. Price flexibility, and government policies and regulation
D. Price stickiness, and government policies and regulation
B. Price stickiness, and shocks to either aggregate demand or aggregate supply
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A mugger steals $25 from John Doe. What can an economist conclude?
A) Nobody gained in the "exchange." B) Both parties gained in the "exchange." C) Only the mugger's wealth has increased. D) Nothing, because economists study strictly voluntary exchanges.
Epsilon is a country whose unit of currency is the omega. New information leads people to expect that the omega will appreciate next year
To keep the foreign exchange value of the omega fairly steady, the Bank of Epsilon will ________ enough omegas on the foreign exchange market so that the ________ omegas will ________. A) buy; demand for; increase B) sell; supply of; increase C) buy; demand for; decrease D) buy; supply of; decrease