When a person bases her future expectations for the economy on all available current data and her own judgment about future policy effects, this is known as
A) the policy irrelevance proposition.
B) rational expectations.
C) irrational expectations.
D) the new classical theory.
B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30. Using the midpoint method, the price elasticity of supply for apartments in Cheyenne is equal to
A) 0.916. B) 0.75. C) 1.09. D) 2.18. E) 0.08.
Measuring the impact of a quota or tariff on the U.S. economy is an example of ________. Stating that a quota or tariff should be eliminated is an example of ________
A) econometric analysis; protectionism B) positive analysis; normative analysis C) statistical analysis; economic analysis D) trade analysis; an opinion
Exhibit 36-1 Bond FaceValueof Bond Price ofthe Bond Annual CouponPayment A $1,000 $850 $25 B $1,000 $950 $41 C $1,000 $1,100 $52 D $1,000 $1,100 $32 E $1,000 $1,000 $50 Refer to Exhibit 36-1. The yield on bond D is approximately
A. 11 percent. B. 3.2 percent. C. 2.9 percent. D. 0.03 percent