Rational expectations theory is based on all of the following assumptions, EXCEPT
A. that individuals and business firms learn through experience to anticipate the consequences of changes in monetary and fiscal policy.
B. that individuals and business firms act instantaneously to protect their economic interests.
C. that demand creates its own supply.
D. that all resource and product markets are purely competitive.
C. that demand creates its own supply.
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How did the increase in the interest rates in the early 80s contribute to the S&L crisis?
What will be an ideal response?
Monetary policy that is focused on slowing down the economy is known as __________ monetary policy.
a. loose b. free c. expansionary d. contractionary
Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets that can be produced, when all resources are fully employed. Production PossibilitiesGood A B C D E
Based on the above information
A. there is no trade-off between smartphones and tablets. B. the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets. C. the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones. D. the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets.
If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are
A) a normal good. B) an inferior good. C) an income complement. D) an income substitute.