If market participants notice that a variable behaves differently now than in the past, then, according to rational expectations theory, we can expect market participants to
A) change the way they form expectations about future values of the variable.
B) begin to make systematic mistakes.
C) no longer pay close attention to movements in this variable.
D) give up trying to forecast this variable.
A
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Refer to Figure 7.1. The benevolent social planner would want the outcome represented in the ________ box
A) upper left B) upper right C) lower left D) either A or C
The economy is in short-run equilibrium
A) at any point on the IS curve. B) only at the natural level of GDP. C) at any point on the LM curve. D) only at a point that is on both the IS and LM curves.
Refer to Figure 14.2. Suppose that, due to a recession, foreign workers begin to leave the United States to search for work in their home countries. Other things equal, this would best be represented in the United States by a movement from
A) point A to point B. B) point B to point A. C) point B to point C. D) point A to point C.
Bonds are debt securities maturing within 10 years
a. True b. False Indicate whether the statement is true or false