People have a strong incentive to form rational expectations because
A) they are guaranteed of success in the stock market.
B) it is costly not to do so.
C) it is costly to do so.
D) everyone wants to be rational.
B
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If stocks are more risky than bonds, why would a rational investor ever buy stocks?
Which of the following is the correct expression for finding the present value of a $1,000 payment one year from today if the interest rate is 6 percent?
a. $1,000 (1.06) b. $1,000(1.06) c. $1,000/(1.06) d. None of the above is correct.
Poverty is most likely to decrease in which of the following situations:
A. The size of the labor force decreases. B. Population grows more rapidly than GDP. C. The population decreases and GDP stays constant. D. Population and the economic growth rate both decrease.
A prisoner's dilemma exists for global pollutants because:
a. countries do not face the full cost of pollution that they generate. b. countries that regulate pollution gain more than countries that do not regulate pollution. c. countries that regulate pollution lose more than countries that do not regulate pollution. d. no country follows international agreements to limit pollution.