The rational expectations hypothesis indicates that people:
a. pay little attention to policy when forming their expectations about the future.
b. expect the next period to be pretty much like the recent past, regardless of policy changes.
c. will always be able to forecast the future accurately.
d. change their expectations about the future if policy changes.
d
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Suppose that opportunity costs are constant and that Gorge can either bake a maximum of six pies or three cakes in a day. Brandi can produce a maximum of eight pies or two cakes in a day. Gorge has an comparative advantage in the production of
A. cakes. B. pies. C. both cakes and pies. D. neither cakes nor pies.
A risk averse person will always buy insurance against risk
Indicate whether the statement is true or false
A second-price auction
a. is also called a Vickrey auction b. is conducted by bidders submitting a single sealed bid c. is where the highest bidder wins and pays the amount of the next highest bid d. all of the above