Expectations are hard to test even though economists know the model the public uses when forming expectations.
Answer the following statement true (T) or false (F)
False
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Most macroeconomic policy consists of:
A) monetary policy B) fiscal policy C) exchange-rate policy D) regulatory policy
If a market basket was defined in 2014 and it cost $10,000 to purchase the items in that basket in 2014, while it cost $12,000 to purchase those identical goods in 2015, then the price index for 2015 is
A. (12000/10000)*100=120. B. 100. C. (10000/12000)*100=83.33. D. unknown given this data.
Costs increase with output in an increasing-cost industry because:
A. input prices increase as the industry competes for scarce resources. B. firms may be forced to use less productive inputs. C. the firms become monopolies. D. Both input prices increase as the industry competes for scarce resources and firms may be forced to use less productive inputs are correct.
Other things equal, a serious recession in the economies of U.S. trading partners will:
A. have no perceptible impact on the U.S. economy. B. cause inflation in the U.S. economy. C. depress real output and employment in the U.S. economy. D. stimulate real output and employment in the U.S. economy.