12. Hayek’s business-cycle theory shows that an increase in the money stock redu
ID: 1128735 • Letter: 1
Question
12. Hayek’s business-cycle theory shows that an increase in the money stock reduces interest rates, ultimately resulting in a change in the
a. equilibrium level of interest.
b. role of monetary policy.
c. structure of production.
d. level of employment.
18. The conditions for perfect competition are the conditions necessary to
a. make equilibrium determinate.
b. promote a large number of buyers and sellers.
c. promote free entry and exit.
d. all of the above.
19. Hayek maintained that the competitive market process is a
a. theoretical impossibility.
b. discovery procedure.
c. coordination process.
d. b. and c.
20. Contemporary Austrian economist Israel Kirzner maintains that the theory of monopolistic competition rules out
a. the discovery process.
b. the need to find new products.
c. the need to vary products.
d. all of the above.
21. Kirzner maintains that monopoly simply means
a. absence of competition.
b. absence of exit barriers.
c. barriers to entry.
d. no market process.
25. Hayek maintained that socialism could not work because the information that individuals use to make their decisions is
a. present only in supply and demand functions.
b. not captured in cost conditions.
c. the subject of continuous discovery.
d. none of the above.
27. The derivation of public goods demand is analogous to the derivation of
a. market demand.
b. individual demand.
c. joint supply.
d. monopoly.
58. Edgeworth’s duopoly model differs from Cournot’s in that
a. Cournot assumed conjectural variation of zero with respect to price; Edgeworth assumed conjectural variation of zero with respect to quantity.
b. Cournot assumed that one competitor had an output limitation so he could not sell all the output that would be demanded under competitive conditions.
c. Edgeworth assumed duopolists do not conjecture about price.
d. equilibrium is unattainable.
84. One way to monitor a manager to ensure she monitors effectively is to
a. make her a member of the team.
b. hire another manager.
c. make her a residual claimant.
d. none of the above.
85. When the quality of a product is uncertain before you purchase it, there is probably
a. something wrong with the product.
b. asymmetric information.
c. team production.
d. a need for advertising.
86. Becker maintains that as more women have gone to work and skill levels have become similar between men and women
a. the gains to specialization are smaller in marriage.
b. there has been a higher divorce rate.
c. there are fewer marriages.
d. all of the above.
Explanation / Answer
12. The correct answer is: a) equilibrium level of interest
Reason: According to the Austrian school of economics, an increase in money stock ultimately reduces the equilibrium level of interest in the market.
P.S. As per Chegg's policy, if nothing is mentioned, then only the first question is to be answered. So if other answers are required, then repost them mentioning the number of questions to be answered.
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