According to the adaptive expectations hypothesis,
a. inflation will cause the long-run unemployment rate to decline.
b. the economic record during the current period strongly influences decision-maker expectations about the future.
c. decision makers will consider the expected impact of policy changes when forming their expectations about the future rate of inflation.
d. future inflation will adapt to conform with the expectations of decision makers.
B
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When asset prices rise above their fundamental economic values, a(n) ________ occurs
A) asset-price bubble B) liability war C) decline in lending D) decrease in moral hazard
The demand for labor is likely to decrease if
a. there is a rise in the demand for the good it produces b. the price of a complementary input falls c. the price of a substitute input rises d. there is a decline in the demand for the good it produces e. there is an increase in the number of firms in the market
Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country. B. creates cultural and social differences among groups in developing countries. C. produces excessive levels of domestic saving. D. redistributes income.
In a Lorenz curve, perfect income equality is represented by
A. a horizontal line. B. a 45-degree line originating from the origin. C. a rectangular hyperbola. D. a vertical line.