Rational expectations theorists believe that governments publicizing their economic goals ______.
a. is necessary to educate the people, so they behave as intended
b. leads people to act in their own interests and undercut the government’s intended outcomes
c. prevents people from being able to anticipate the future of the economy
d. is the most important step in being able to meet the government’s goals
b. leads people to act in their own interests and undercut the government’s intended outcomes
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For a natural monopoly, economies of scale
A) exist along the long-run average cost curve at least until it crosses the market demand curve. B) and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. C) lead to a legal barrier to entry. D) as well as constant returns to scale and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. E) are totally absent.
The primary purpose of labor unions is to
A) ensure that workers receive adequate safety training. B) negotiate with employers about wages and working conditions. C) endorse candidates and donate money to them. D) ensure that all members earn identical incomes.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period falls, and real GDP rises. c. The quantity of real loanable funds per time period rises, and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following is a tool of monetary policy often used by the Fed for altering the reserves of commercial banks?
A. Open-market operations B. Check collection C. Issuing currency D. Reserve requirement