When economists say consumers, firms, or investors are behaving rationally, they mean:
A) they recognize that it is not worthwhile to invest in risky stocks
B) they are taking actions to reach their goals, given the available information
C) they have significant investment expertise
D) they are consistently able to avoid poor performing stocks
B
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In peak-load pricing,
A) marginal revenue is equal in both periods. B) marginal revenue in the peak period is greater than in the off-peak period. C) marginal revenue in the peak period is less than in the off-peak period. D) the sum of the marginal revenues is greater than the sum of the marginal costs.
According to the text, critics point out that the costs incurred by firms due to regulations
A) increase production costs. B) lower production costs to the shutdown point. C) reduce taxes too far. D) none of the above.
Briefly and concisely define the following terms:
a. fiscal federalism b. horizontal equity c. vertical equity d. benefits principle of taxation
Assume a country experiences heavy capital outflows. What is the first round effect on the value of the domestic currency?
a. The value of the currency rises. b. The value of the currency is unaffected. c. The value of the currency falls. d. The change in the value of the currency is ambiguous.