Rational expectations are forecasts
A. that, while not necessarily correct, are the best that can be made given the available data.
B. that are technically correct.
C. that accurately predict the short-term trade-off between inflation and unemployment.
D. made by economists using the most sophisticated econometric models.
Answer: A
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An economy in which people exchange goods and services in a market is called a
A) command economy. B) socialist economy. C) market economy. D) centrally planned economy.
The main argument in favor of Fed independence is that
A) interest rates would probably be lower if Congress controlled the Fed; thus hurting savers. B) the Constitution requires it. C) monetary policy is too important and too technical to be determined in the political arena. D) congressional control of the Fed was tried during the 1960s and did not work well.
If an average cost curve is U-shaped, then:
a. costs per unit remainconstant throughout the entire range of production. b. costs per unit fall throughout the entire range of production. c. costs per unit increase throughout the entire range of production. d. costs per unit first rise, then reach a maximum, and then begin to fall as output is increased. e. costs per unit first fall, then reach a minimum, and then increase as output is increased.
Small-denomination time deposits are part of M2, but not part of M1
Indicate whether the statement is true or false