According to the rational expectations theory, expansionary monetary policy is fully effective only if
a. the policy is anticipated by workers and firms.
b. aggregate supply shifts to the left.
c. the economy is operating at or above its potential output level.
d. policy makers follow through on their previously announced plans.
e. the effects of the policy are unexpected.
E
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The payment of a dividend by an American company to a foreign stockholder represents
A) a debit in the U.S. capital account. B) a credit in the U.S. current account. C) a credit in the U.S. official reserve account. D) a debit in the U.S. current account.
An electricity provider charges consumers $0.20 per kWh for the first 100 kWh, $0.25 per kWh for the next 50 kWh, and $0.27 per kWh for all subsequent kWH of usage. This would be considered
A) an antitrust violation. B) an example of increasing-block pricing. C) bad business practices. D) an example of three-part pricing.
In the above figure, if the wage rate fell below Wb, in the short run the firm would
A) hire more workers. B) fire several workers. C) reduce its level of output. D) keep all its input levels the same as they were before.
In an economy consisting of two people producing two goods, it is possible for one person to have the absolute advantage and the comparative advantage in both goods
a. True b. False Indicate whether the statement is true or false