If expectations are rational, the difference between the actual inflation rate and the forecast for inflation is:
a. positive when inflation is increasing
b. negative when inflation is increasing.
c. random.
d. greater, the more accurately people anticipate the effects of government policy.
c
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The table above shows some data that describe Tom's T-Shirts' total product when Tom's has 1 sewing machine. Diminishing marginal returns begin when the ________ is employed
A) second worker B) fifth worker C) fourth worker D) third worker
Figure 9.1 shows three aggregate demand curves. A movement from curve AD1 to curve AD2 could be caused by a(n)
A) increase in the money supply. B) decrease in government spending. C) increase in taxes. D) increase in the price level.
Explain Gresham's Law
Which of the following is true of the crises witnessed by the southeast Asian countries in the 1990s?
a. The crises were sparked by the conversion from a fixed exchange rate regime to a flexible exchange rate regime. b. The crises occurred because among all countries, Malaysia owed the maximum short-term debt to foreigners. c. The consumption of petroleum products grew at an uncontrolled rate in Indonesia. d. Indonesia was the only country that owed a substantial long-term debt to the US. e. The stock prices dropped by 26 percent in Korea and by 57 percent in Malaysia.