According to the theory of rational expectations,
a. workers' experience tells them that government action to lower unemployment will not affect inflation.
b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects.
c. policy goals can be achieved easily in the short run.
d. workers' wage demands include anticipated inflation.
e. expansionary monetary policy will lead to permanent interest rate declines.
d
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Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one advantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would have the ability to share risk with shareholders. B) As a sole proprietor, Torrie would face limited liability. C) As a sole proprietor, Torrie would have both ownership and control over the business. D) All of the above would be advantages of setting up her business as a sole proprietorship.
A good economic model should capture as many details about real-world behavior as possible
a. True b. False Indicate whether the statement is true or false
A decrease in the personal income tax rate ________ disposable income, which ________ consumption.
A. increases; increases B. increases; decreases C. decreases; decreases D. decreases; increases
A firm's long-run average cost curve is
A. the envelope of the firm's variable cost curves. B. the locus of points made up of the minimum point on each short-run average total cost curve when only one input may be adjusted. C. the locus of points representing the minimum unit cost of producing any given rate of output when all inputs may be adjusted. D. identical to the lowest short-run average cost curve the firm has.