The theory of rational expectations concludes that:
A. the public's expectations can influence the outcome of monetary policy but not of fiscal
policy.
B. the public's expectations can influence the outcome of fiscal policy but not of monetary
policy.
C. the public's expectations as to the effects of economic policies tends to reinforce the
effectiveness of those policies.
D. by reacting in its self-interest to the expected effects of stabilization policy, the public tends
to negate the impact of those policies.
D. by reacting in its self-interest to the expected effects of stabilization policy, the public tends
to negate the impact of those policies.
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The only way governments can finance a deficit is by printing new money
Indicate whether the statement is true or false
In calculating GDP, "transfer payments" are
A) included because they are re-valuations of existing wealth. B) excluded because no goods or services were produced in exchange for them. C) included because they are payments for labor services. D) excluded because used goods already counted the year they were produced.
When people make choices they typically know with certainty which choice is best
a. True b. False Indicate whether the statement is true or false
A recent study suggested that moderate wine drinking may actually benefit one's health. If this information leads to an increased demand for wine, we would expect
a. both the price and quantity of wine sold to increase. b. both the price and quantity of wine sold to decrease. c. the price to decrease and the quantity of wine sold to increase. d. the price to increase and the quantity of wine sold to decrease.