The theory of ________ assumes that individuals will use all information available to them to form the most accurate possible expectations about the future.

A. naïve expectations
B. Keynesian economics
C. rational expectations
D. adaptive expectations


Answer: C. rational expectations

Economics

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Among economists, it is generally believed that

A) the federal budget deficit will be eliminated within 10 years. B) the public debt will be paid off within 10 years. C) entitlement spending will continue to decline. D) the federal government will find it difficult to cut entitlement programs.

Economics

Inflation target refers to the commitment of central bankers to keep inflation below a certain rate for the next year or two

a. True b. False Indicate whether the statement is true or false

Economics

In low-income LDCs, per capita income is typically _______ and per capita growth rate is ________

a. between $100 and $500 per year; negative or less than 2 percent per year b. between $1000 and $5000 per year; 2 to 10 percent per year c. between $10,000 and $50,000 per year; typically negative d. between $1 and $50 per year; negative e. between $0 and $100 per year; negative

Economics

Why do price ceilings tend to cause persistent imbalances in the market?

a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

Economics