Under the rational expectations hypothesis, which of the following is the most likely effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase.
b. In the short run, the real rate of output will increase, but in the long run, it will be unchanged.
c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher.
d. In the short run, the impact on the real rate of output is uncertain; in the long run, it will remain unchanged.
D
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The natural rate of employment
a. will change with changes in the long run aggregate supply curve. b. will be a level such that the expected real wage equals the actual real wage. c. will be at a level where the actual and expected price levels are equal. d. both a and c. e. all of the above.
An excise tax levied on a product will impose a smaller relative burden on consumers (and a larger relative burden on sellers) when:
a. the supply of the product is relatively inelastic. b. the supply of the product is relatively elastic. c. the demand for the product is relatively elastic. d. either a or c is true.
Which of the following examples would most likely be subject to survivor bias?
A. a study that randomly sampled first-year law-school students to see how many survived to make it to their second year in law school B. a study that randomly sampled men and women who suffered food poisoning from dining at a specific fast-food restaurant chain to determine the incidence of continued patronage of that particular chain of restaurants C. a study that randomly sampled an equal number of 40-year old men and 60-year old men to measure incidences of Type 1 diabetes D. a study that randomly sampled flood victims whose homes were destroyed to see if they were likely to rebuild their homes on the same property
The economy has gone into a recession. You have majored in computer science and, because of the recession, have difficulty in finding a job. According to the information in the chapter, should you go back to school and get a second major?
A) Yes, the recession will ensure that you will never find a job as a programmer. B) Yes, the recession will lower income in my field permanently. C) No, the recession will most likely be short-lived and I can get a job after it is over. D) No, the recession will have no impact on my ability to get a job or my future income.