If someone asked you to predict the price of gas in a month, and you decided to just guess by adding a few cents to the current price of gas, which you know, your answer would exhibit:
A. rational expectations.
B. time inconsistency.
C. anchoring.
D. transitivity.
Answer: C
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Most economists are in agreement that minimum wages cause unemployment and make some people worse off as a result. However, does that imply that it makes everyone worse off? Who might benefit?
What will be an ideal response?
In an aggregate demand and aggregate supply graph, an expansionary fiscal policy can be illustrated by a:
a. Leftward shift in the aggregate demand curve b. Change in the price level c. Leftward shift in the aggregate supply curve d. Rightward shift in the aggregate demand curve
When the price level increases people:
A. feel more wealthy. B. demand a smaller quantity of goods and services in the aggregate. C. have the same real value of assets, regardless of the change in the price level. D. want to spend more, but can't due to the prices of all goods and services going up.
Which of the following contributes most to the fluctuations of growth and decline that characterize business cycles?
a. consumption b. investment c. government purchases d. next exports