The rational expectations hypothesis implies that discretionary macro-policy will:
a. be ineffective, even in the short run.
b. be effective in the short run but ineffective in the long run.
c. be effective both in the short run and long run.
d. make it possible to trade-off a higher rate of inflation for a lower rate of unemployment.
a
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There are very few, if any, farms within the city limits of Chicago because
A) zoning laws have always prohibited them. B) the land under the city of Chicago is unfertile. C) Chicago is known for its butchers and freighters, not its farmers. D) the land is in extremely great demand for non-agricultural purposes.
The main purpose of industrial regulation is to:
A. lower price to marginal cost. B. lower price to average total cost such that the firm earns a fair return. C. break monopolies into competing firms. D. reduce X-inefficiency.
Which of the following is true for a perfectly competitive market in short-run equilibrium?
A. The quantity supplied equals the quantity demanded. B. The typical firm earns zero economic profit. C. The typical firm will always make a positive profit. D. All of these are correct.
Nancy returns to school to study medicine. After graduating during an economic boom, she spends six months looking for a job. During this period, she is considered
A. Structurally unemployed. B. Seasonally unemployed. C. Frictionally unemployed. D. Cyclically unemployed.