Most economists would agree that, unless it incorporates rational expectations or something like it, a model cannot account for
A) the Great Depression.
B) shifts in aggregate supply.
C) the relationship between consumption and income.
D) the stagflation of the 1970s.
E) the different initial impact of a permanent versus a temporary policy change.
E
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Because of a late night out with friends, Alyssa decided to sle ep in rather than attend her 7:50 a.m. economics class. According to economic analysis, her choice was
a. irrational, because economic analysis suggests you should always attend classes that you have already paid for. b. irrational, because oversleeping is not in Alyssa's self-interest. c. rational only if Alyssa has not missed any other classes during the current semester. d. rational if Alyssa values the additional sleep more highly than the extra benefit she expects to receive from attending the class.
A primary function of a central bank is to
A) regulate dividend payments by corporations. B) act as a regulator of banks. C) control the bond market. D) publish statistics on banking and related financial matters.`
Which of the following causes a leftward shift in the short-run aggregate supply curve?
A. an increase of goods prices while nominal incomes are unchanged B. an increase in nominal incomes (wages and salaries) C. an increase of full-employment real GDP D. an increase of personal consumption expenditures while the price level is unchanged
(Consider This) Which of the following methods is used by farmers to "hedge" against short- run price and output fluctuations?
A. Securing prices for their output in the futures market. B. Purchasing crop revenue insurance to insure against natural disasters. C. Leasing land to other farmers in return for stable rent payments. D. All of these risk-management techniques are used.