The Lucas supply function, in combination with the assumption that expectations are rational, implies that
A. both anticipated monetary and fiscal policy changes will affect real output.
B. neither anticipated monetary policy changes nor anticipated fiscal policy changes will have an effect on real output.
C. an anticipated monetary policy change will have no effect on real output, but an anticipated fiscal policy change will have an effect on real output.
D. an anticipated monetary policy change will have an effect on real output, but an anticipated fiscal policy change will not have an effect on real output.
Answer: B
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According to Keynes, the "stickiness" of wage rates could best be explained by
A) short-term labor contracts. B) minimum wage laws. C) unions and long-term labor contracts. D) government interference.
Which of the following is not a characteristic of an assurance game?
A) Neither player has a dominant strategy. B) Nash equilibria exist at every outcome where the players successfully coordinate. C) Each of the Nash equilibria offers identical payoffs to any particular player. D) The payoff for coordinating is higher than the payoff for not coordinating.
According to economic analysis, while making a decision, an individual compares the benefits expected from one option with the benefits expected from other options
a. True b. False Indicate whether the statement is true or false
A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
A. beer and marijuana are substitute goods. B. beer and marijuana are complementary goods. C. beer is an inferior good. D. marijuana is an inferior good.