Under adaptive expectations theory, people persistently:
A. underestimate inflation when it is slowing down.
B. overestimate inflation when it is accelerating.
C. underestimate inflation when it is accelerating.
D. adapt to the prevailing inflation rate.
Answer: C
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The market demand for a good is determined by horizontally summing the demand curves of individual consumers
Indicate whether the statement is true or false
Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. Also suppose the U.S. has an absolute advantage in the production of both airplanes and televisions. The U.S. should
a. not trade airplanes or televisions with Japan. b. import airplanes from Japan and export televisions to Japan. c. export airplanes to Japan and import televisions from Japan. d. export both airplanes and televisions to Japan.
In this graph, output level RGDP2 is ______.
a. sustainable at equilibrium point E1
b. sustainable at equilibrium point e2
c. sustainable at equilibrium point E3
d. not sustainable at equilibrium points E1, e2, or E3
Using the rule of 72, determine the approximate time it will take $1,000 to double given the following interest rates.a) 5.5%b) 10.0%c) 30.0%d) 2.0%e) 4.5%
What will be an ideal response?