In the rational expectations model
a. markets are perfectly competitive and in equilibrium.
b. markets may not clear even if wages and prices are otherwise perfectly flexible.
c. markets may temporarily be in disequilibrium.
d. only anticipated changes in aggregate demand affect output.
A
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The price effect describes the:
A. decrease in the quantity of labor supplied in response to a higher wage. B. increase in the quantity of labor supplied in response to a lower wage. C. increase in the quantity of labor supplied in response to a higher wage. D. increase in the quantity of labor demanded in respond to a higher wage.
The airline and long-distance telephone service industries are examples of
a. monopolistic competition b. monopolies c. oligopolies d. perfect competition e. oligopolistic competition
In the long run under perfect competition, all firms in the same market
a. earn the same money profit b. have the same opportunity costs c. earn the same economic profit d. face the same explicit costs e. earn the same money profit and the same economic profit
Inflation and unemployment both increase as the money supply increases
a. True b. False Indicate whether the statement is true or false