The proponents of rational expectations believe that
a. there will be a substantial time lag before people anticipate the eventual effects of a shift to a more expansionary macro-policy.
b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment.
c. the inflationary side effects of expansionary policies will be anticipated quickly, and therefore, even their short-run effects on real output and employment will be minimal.
d. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.
C
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The typical monopolistically competitive firm earns no economic profit in the long run, regardless of whether or not it advertises
a. True b. False
Government ownership of monopoly industries is termed
a. economic regulation b. antitrust c. nationalization d. creative destruction e. rule of reason
Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
What will be an ideal response?
Rent seeking refers to ______.
a. politicians trading votes b. exempting homeowners from certain taxes c. using resources to gain political favor d. choosing not to vote unless it counts