Define behavioral economics
What will be an ideal response?
Behavioral economics studies the ways that limits on the ability of people's brains to compute and implement rational decisions influence their economic actions.
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When real Gross Domestic Product (GDP) falls, which of the following will automatically occur?
A) an increase in income tax revenues B) a decrease in all tax rates C) a decrease in unemployment compensation expenditures D) a decrease in income tax revenues
Refer to the above figure. Suppose the economy's initial equilibrium is represented by the intersection of LRAS2 and AD2
Now there is an increase in labor productivity which increases total planned production at any given price level and aggregate demand remains stable. The resulting change in the economy's long-run equilibrium position would be represented by a A) movement from B to D. B) movement from C to D. C) movement from C to B. D) movement from A to B.