According to the rational expectations hypothesis, an individual's assessment of future economic performance
A. does not consider past performance.
B. considers both past performance and current economic policy actions.
C. only considers past performance.
D. does not consider the impact of inflation.
Answer: B
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Keynes believed in all of the following EXCEPT.
A. the expected rate of profit was more important than the interest rate. B. recessions are temporary. C. expansionary government spending and tax cuts are cures for recessions and depressions. D. in the short run, aggregate demand should be manipulated to stabilize the economy.
How does an inflationary gap occur?
What will be an ideal response?
Which of the following statements is TRUE about the difference between the public debt and the government budget deficit?
A. The public debt for this year will increase or decrease depending upon whether there is a government budget deficit or a government budget surplus. B. The public debt always increases while the government budget deficit may increase or decrease. C. There is no relationship between the public debt and the government budget deficit since one is a stock measure and the other is a flow measure. D. The public debt is a flow measure and the government budget deficit is not a flow measure.
Average Variable Cost is
A. the per unit fixed cost of production. B. the per unit variable cost of production. C. the addition to cost associated with one additional unit of output. D. the per unit cost of production.