The application of rational expectations to the permanent-income hypothesis implies that information contained in
A) only past income levels will determine permanent income.
B) only past income levels will determine transitory income.
C) only new changes in income that are unanticipated can change permanent income.
D) only new changes in income that are anticipated can change permanent income.
C
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Assuming all else equal, if households are optimistic about their future income, it is likely to cause a(n):
A) downward movement along their credit demand curve. B) upward movement along their credit demand curve. C) leftward shift of their credit demand curve. D) rightward shift of their credit demand curve.
A corporation's earnings are the amount of revenue it receives for the sale of its products
a. minus its cost of production as measured by its accountants. Earnings must be paid out as dividends. b. minus its cost of production as measured by its accountants. Earnings may be paid out as dividends or retained by the corporation. c. minus its direct and indirect costs as measured by its economists. Earnings must be paid out as dividends. d. minus its direct and indirect cost as measure by its economists. Earnings may be paid out as dividends or retained by the corporation.
Through good economic years and bad, many European economies had unemployment rates hovering near _________ since the 1970s.
A. 40% B. 10% C. 20% D. 15%
Assume that Maya and Miguel each has 60 hours available. If each person divides his/her time equally between the production of mixers and toasters, then total production is
A. 3.5 mixers and 6 toasters. B. 20 mixers and 12 toasters. C. 8 mixers and 16 toasters. D. 15 mixers and 9 toasters.