According to the adaptive expectations theory, after many years of rising prices, people tend to ignore past experience in predicting the future rate of inflation
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is true?
i. Comparative advantage drives international trade. ii. Compared to a no-trade situation, imports make domestic producers better off. iii. Tariffs lower the domestic price of imported goods. A) Only i B) Only ii C) Only iii D) i and ii E) i and iii
The real wage rate is $35 an hour. At this wage rate there are 100 billion labor hours supplied and 200 billion labor hours demanded. There is a
A) shortage of 300 billion hours of labor. B) shortage of 100 billion hours of labor. C) surplus of 100 billion hours of labor. D) surplus of 300 billion hours of labor. E) shortage of 200 billion hours of labor.
An increase in the real money supply will have its maximum effect on the equilibrium level of GDP when the
A) LM curve is vertical. B) LM curve is horizontal. C) IS curve is vertical. D) IS curve is negatively sloped.
The statement that "at 10 percent, the interest rate is too high for families to buy a home they could have afforded when the interest rate was below 7 percent ," is a(n)
a. positive statement b. normative statement c. morally ambiguous philosophical position d. affront to the American dream e. value judgment