The view that individuals weigh all available evidence when they formulate their expectations about economic events (including information concerning the probable effects of current and future economic policy) is called
a. the adaptive expectations hypothesis.
b. the permanent income hypothesis.
c. the rational expectations hypothesis.
d. the Phillips curve.
C
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One could argue that price competition among oligopolistic firms is highly likely to cause the revenues of individual firms to decline, while competition on the basis of product differentiation could cause demand, and total revenues, of individual
firms to increase. Indicate whether the statement is true or false
Economic growth may be represented by a(n):
a. leftward shift of a production possibilities curve. b. outward shift of a production possibilities curve. c. movement along a production possibilities curve. d. production possibilities curve that remains fixed.
Refer to the graph above. Assume that the economy is in a recession with a price level of P 1 and output level Q 1. The government then adopts an appropriate discretionary fiscal policy. What will be the most likely new equilibrium price level and output?
P1 and Q1 P1 and Q3 P2 and Q2 P2 and Q4
What is the substitution effect for leisure demand?
What will be an ideal response?