According to rational expectations theory,
a. there is absolutely nothing government can do, even in the short run, to reduce the economy's unemployment rate.
b. the government can use fiscal policy such as increased government spending or lower tax rates to reduce unemployment.
c. a modern extension of Keynesian economics exists.
d. discretionary fiscal policy is essential for prolonged growth.
e. market participants can be fooled in the long run by monetary and fiscal policy rules.
a
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Refer to the figure above. The region PCCAF shows the ________ after the imposition of the price ceiling
A) government revenue B) consumer surplus C) producer surplus D) deadweight loss
Assume that Jane has limited wealth to invest in two assets both of which promise her returns worth $3,000 after two years. The first is a bank deposit assuring an interest of 10 percent per annum and the second is a private bond with an interest rate of 8 percent per annum. Which of the two would require a low initial investment and of what amount?
a. The bond requiring an initial investment worth $2,564 . b. The bank deposit requiring an initial investment worth $2,479. c. The bond requiring an initial investment worth $2,479. d. The bank deposit requiring an initial investment worth $2,564.
When economists and government officials speak about the money supply, they usually mean M2
a. True b. False
An increase in the quantity of resources available
A) shifts the PPF leftward. B) shifts the PPF rightward. C) moves the economy to a new point up along a given PPF. D) moves the economy to a new point down along a given PPF.