According to rational expectations theory,
A) every day is a new day and yesterday's occurrences have no bearing on today's decisions.
B) when making decisions a person will consider only information based on past experience.
C) even though a person considers information related to future events as potentially important for decision making, he realizes that such information is unreliable and worthless.
D) past experience is a good guide for decision making, but so is information related to possible future outcomes.
D
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Use the following diagram for the corn market to answer the question below.
If the price in this market is $4 per bushel, there will be a
A. shortage, and the price will tend to fall. B. surplus, and the price will tend to rise. C. surplus, and the price will tend to fall. D. shortage, and the price will tend to rise.
A tariff has the effect of:
A. raising the price of the imported product. B. increasing the demand for the exported product. C. increasing the demand for the imported product. D. increasing the supply of the imported product.
The real value of money ________ as the price level falls.
A. remains the same B. decreases C. increases D. None of these
Kathleen has eaten ten cookies. The tenth cookie makes Kathleen sick. This means that for Kathleen
A. the opportunity cost of cookies is high. B. the tenth cookie has negative utility. C. the tenth cookie has little utility. D. cookies must have a zero price.