Economists favoring the rational expectations theory maintain that
A. market participants plan counterstrategies to what the Fed is planning to do.
B. the Fed has no real short-term effect on output and employment unless it truly surprises markets.
C. market participants anticipate government policies.
D. All of the choices are correct.
D. All of the choices are correct.
You might also like to view...
If a market begins in equilibrium and then the demand curve shifts leftward, a
A) surplus is created, which is eliminated by a rise in price. B) shortage is created, which is eliminated by a rise in price. C) shortage is created, which is eliminated by a fall in price. D) surplus is created, which is eliminated by the supply curve shifting leftward. E) surplus is created, which is eliminated by a fall in price.
Refer to Figure 4-8. What is the value of the portion of producer surplus transferred to consumers as a result of the rent ceiling?
A) $40,000 B) $100,000 C) $125,000 D) $140,000
A random walk model can more accurately predict exchange rates as compared to a sophisticated forecast
A) always. B) for forecasts up to a year away. C) for forecasts longer than a year away. D) never. E) because of the predictability of exchange rates.
Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy may cause the demand for dollar to _____________ and the supply for dollar to __________
a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease