How are rule-based policies similar to adaptive expectations?
What will be an ideal response?
Rule-based policies are tied to past information and understandings. They embody the wisdom and limitations of the past. Rules are immune to new information and judgment. Rule-based policies are immune to short-sighted influences, fads, and conceptual "breakthroughs."
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If there is an advancement in the technology used to produce a product, what is the likely effect it may have on the supply?
A) The company would not change its manufacturing. B) It would increase the supply. C) It would decrease the supply. D) More people would be needed to produce the product.
An intermediate good is
A) always counted when measuring GDP because it doesn't represent time spent in production of a final good or service. B) a good whose value is of neither a high grade nor a low grade. C) a good that is sold to the government and then redistributed to the poor. D) any good that is resold by its purchaser rather than used as is.
One way to overcome the problem of time inconsistency is to
a. legislate policy rules. b. grant policymakers independence.. c. appoint policy makers with credibility. d. both a and c. e. all of the above.
The long-run market supply curve in a competitive market will
a. always be horizontal. b. be the portion of the MC that lies above the minimum of AVC for the marginal firm. c. typically be more elastic than the short-run supply curve. d. be above the competitive firm's efficient scale.