The fact that private sector economic agents cannot be systematically fooled by economic policymakers is implied by
A) the Phillips curve.
B) time inconsistency.
C) commitment.
D) the rational expectations hypothesis.
D
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Trade is only beneficial if a nation has an absolute advantage in producing all products
Indicate whether the statement is true or false
Charging drivers with good records lower premiums than drivers with bad records is an example of an attempt by insurance companies to deal with the problem of
A) moral hazard. B) adverse selection. C) drunk driving. D) failure of policyholders to keep paying their premiums.
If you were a supply-side economist, you would argue that
a. reductions in government spending cut basic public goods, such as roads which hurts the private sector, particularly private investment b. increases in government spending stimulates the economy as a whole which would include the private sector c. increases in government spending cause private sector investment to fall because the government competes with the private sector for investment funds and this leadsto higher interest rates d. reductions in government spending cause private sector investment to fall because the government raises interest rates by borrowing e. increases in private consumption is good for the private sector of the economy and for the government as well because people with more income pay more tax
The state can expropriate the profits from innovation through legal means.
a. true b. false