According to the rational expectations hypothesis, unpredictable shocks explain the existence of
A. the federal deficit.
B. the national debt.
C. unemployment.
D. trade barriers.
Answer: C
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Economic efficiency in a competitive market is achieved when
A) producer surplus equals the total amount firms receive from consumers minus the cost of production. B) the marginal benefit equals the marginal cost from the last unit sold. C) consumers and producers are satisfied. D) economic surplus is equal to consumer surplus.
A cubic cost function implies:
A) a U-shaped average variable cost curve. B) a U-shaped marginal cost curve. C) a U-shaped average cost curve. D) all of the above
Foreign repercussions of changes in domestic imports cause the true domestic spending multiplier to be less than 1/(MPS+MPI)
a. True b. False Indicate whether the statement is true or false
The expected effects of an increased budget deficit are
A. higher real interest rates. B. exchange rate depreciation. C. lower inflation. D. All of these responses are correct.