If firms have rational expectations and if they set prices and wages on this basis, then prices and wages
A. will never be set at market-clearing levels.
B. will always be above market-clearing levels.
C. will always be at market-clearing levels.
D. will, on average, be set at market-clearing levels.
Answer: D
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The opportunity cost of going to college is best measured by the
a. cost of room and board b. cost of tuition c. cost of room and board plus tuition d. income forgone by not working, plus tuition e. income forgone by not working, plus tuition and room and board
If there is no one who is interested in borrowing from a bank:
a. the bank's excess reserves will be zero. b. there will be no process of money creation. c. the required reserve ratio must be equal to zero. d. the required reserve ratio must be equal to 100 percent.
A market's structure is described by
A) the number of firms in the market. B) the ease with which firms can enter and exit the market. C) the ability of firms to differentiate their product. D) All of the above.
Homogeneous products are indistinguishable from one another.
Answer the following statement true (T) or false (F)