If the level of prices and output are compatible with both buyers' and sellers' intentions, then the policy goals are satisfied.
Answer the following statement true (T) or false (F)
False
Ideally, macro equilibrium occurs at the full-employment level of output, but this is not always the case.
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Critics of rational expectation theory believe: a. most people are truly not very informed about the effects of a policy change
b. most people do not adjust their behavior very rapidly to changes in government policies, in part because they are not informed about the effects of policy changes. c. that wages and prices are not as flexible as the rational expectation theory assumes. d. all of the above.
If over a period of time real gross domestic product (GDP) increases while nominal GDP decreases, then this implies
a. a significant rise in the price level. b. a significant drop in the price level. c. that real GDP is higher than nominal GDP. d. that the given period occurs before the base period. e. that the given period year occurs after the base period.
Commercial banks increased their involvement in mortgages over the years due to:
A. the ability to securitize mortgages which made them more liquid. B. the increase in commercial loans demanded due to the development of the commercial paper market. C. the reduced risk of borrowers' defaulting on mortgage loans. D. the demands of regulators.
AT&T argued that the merger with T-Mobile should be approved by the Justice Department because
A. There are many wireless providers available for consumer. B. AT&T will gain additional wireless towers from T-Mobile. C. It will result in higher prices for consumers. D. The merger will lead to efficiencies because a larger firm can enjoy economies of scale and can keep prices low.