According to the theory of rational expectations, the government can influence output
a. with appropriate fiscal and monetary policy.
b. in the short run, but not in the long run.
c. without affecting the price level.
d. only by making unexpected changes that impact aggregate demand.
D
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The exchange rate of a currency in a black market:
A) will be less favorable to sellers of domestic currency than the official exchange rate. B) will be more favorable to sellers of domestic currency than the official exchange rate. C) will be more favorable to both the sellers and the buyers of domestic currency than the official exchange rate. D) will be less favorable to both the sellers and the buyers of domestic currency than the official exchange rate.
What is the best outcome for society: When firms in an oligopoly operate as a monopoly or when they act as perfect competitors? Briefly explain your answer
What will be an ideal response?
Relative performance evaluation reduces the labor cost borne by the firm by:
A. using the employee's output for setting the compensation. B. focusing on the near term while setting incentive pay. C. ratcheting up each year's performance targets. D. filtering out common shocks from employee incentive pay.
How does a "rules-based" approach to monetary policy differ from "discretionary intervention"?
What will be an ideal response?