Rational expectations imply
a. markets always clear.
b. that prices are "sticky"
c. policy that is unpredictable is irrelevant to economic outcomes.
d. both a and c.
e. None of the above.
E
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Examine the following statements and determine if they are normative or positive in nature. Explain your answer
a. The U.S. automotive industry registered its highest growth rate in 5 years in 2012; U.S. auto sales increased by 13% compared to 2011 . b. The U.S. government should increase carbon taxes to control emissions that cause global warming.
Refer to Table 9-12. Prior to trade, what was the opportunity cost to produce 1 sword in Estonia?
A) 1/3 of a belt B) 3/5 of a belt C) 1.67 belts D) 3 belts
If there is currently an inflationary gap: a. The price level will tend to rise. b. Real output will tend to fall
c. Both a. and b. will occur. d. None of the above will occur.
Force that encourages people to start businesses and attempt to improve their material well-being
a. profit motive b. capitalism c. consumer sovereignty d. voluntary exchange