The capacity of a firm can best be described as:
A) when a firm are producing maximum output
B) a firm's production when operating normal hours using a normal sized workforce
C) when a firm makes full use of all the space available in his factory or building
D) when all of the firm's workers are producing at their maximum potential
B
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Real business cycle theory explains the business cycle as the result of
a. unstable investment demand. b. excess growth of the quantity of money. C. shocks to consumer spending habits d. fluctuations in productivity.
The difference between the monetarist and Keynesian views on discretionary monetary policy is that the monetarists
a. believe monetary policy is a stabilizing force and Keynesians believe it is primarily destabilizing. b. Keynesians think that monetary policy is always used effectively. c. believe monetary policy is a destabilizing force and Keynesians believe it is potentially stabilizing. d. favor "fine tuning" the economy by use of monetary policy while the Keynesians do not.