Systematic overestimation or underestimation of inflation will
a. occur under rational expectations but not under adaptive expectations.
b. occur under adaptive expectations but not under rational expectations.
c. occur under both rational and adaptive expectations.
d. not occur under either rational or adaptive expectations.
B
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If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:
A. reduce output to earn greater profits or smaller losses. B. leave its output level unchanged provided it is covering its variable cost. C. expand output to earn greater profits or smaller losses. D. raise its price.
Refer to the table below. According to the table, Julia has the absolute advantage in: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. pies. B. cakes. C. neither pies nor cakes. D. both pies and cakes.
Why are elected representatives far more likely to be informed about the issues on which they vote, compared to the typical citizen-voter?
A) A politician loves politics; citizens hate it. B) A politician is more patriotic than citizens. C) A politician is rationally ignorant; citizens are just plain ignorant. D) A politician's vote has a far greater probability of affecting the outcome, compared to a citizen's vote.
Nonlinear least squares estimators in general are not
A) consistent. B) normally distributed in large samples. C) efficient. D) used in econometrics.