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.
d
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The marginal product refers to the impact of which unit of a productive resource?
a. first b. middle c. last d. average
Using the points on the diagram below, identify which combinations of these points illustrate diminishing returns to capital. Give a brief explanation to support your answer
What will be an ideal response?
At its current level of quantity, a perfectly competitive firm's marginal revenue is $2.50, its short-run marginal cost is $2.50 and its long-run marginal cost is $2.00. Which of the following statements is true?
A) The firm is maximizing its long-run profit, but not its short-run profit. B) The firm should decrease its production to maximize profit in the short-run. C) The firm should increase its production to maximize profit in the short-run. D) The firm is maximizing its short-run profit, but not its long-run profit.
Looking at the _________ approach to GDP accounting, the largest component of GDP in 2003was _______
a. expenditure; government purchases b. national; proprietor's income c. national income; net interest d. expenditure; personal consumption expenditures e. expenditure; compensation of employees