The standard cobweb model makes which two assumptions?
A. Workers are forward looking, and job adjustments are instantaneous.
B. Workers are forward looking, and job adjustments take time.
C. Workers are myopic, and job adjustments are instantaneous.
D. Workers are myopic, and retraining of one's skills happens instantaneously.
E. Workers are myopic, and job adjustments take time.
Answer: E
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One key implication of rational expectations is that
A) anticipated monetary policy has no effect on the rate of unemployment or the level of real GDP. B) unanticipated monetary policy has no effect on the economy but anticipated monetary policy does have an effect on the economy. C) anticipated monetary policy can affect the rate of unemployment but not the level of real GDP. D) both unanticipated monetary policy and anticipated monetary policy have an effect on the economy.
Refer to Figure 18.1. ________ has a comparative disadvantage in bicycles and ________ has a comparative disadvantage in hang gliders
A) Canada; the United States B) The United States; Canada C) Canada; Canada D) The United States; the United States
A prisoner's dilemma leads to a noncooperative equilibrium
Indicate whether the statement is true or false
The only reason that exchange rates change is because overall price levels in the countries change
Indicate whether the statement is true or false