In the rational expectations theory, a temporary change in real output could result from:

A. Anticipated price-level changes
B. A price-level surprise
C. A coordination failure
D. Insider-outsider relationships


B. A price-level surprise

Economics

You might also like to view...

What is unplanned investment? How does it occur?

What will be an ideal response?

Economics

The Neoclassical Heckscher-Ohlin model assumes that all producers of any industrial product has knowledge of, and may avail itself of the same production technology available to producers in any other country

Many have flagged this identical technology assumption as unrealistic. During the past half century, the relative importance of Multinational Corporations (MNCs) in world trade has steadily increased. How would this trend affect the realism of the "identical technology" assumption?

Economics

Autonomous consumption is 700 and the marginal propensity to consume is 0.6. Calculate the average propensity to save when disposable income is (a) 10,000, (b) 12,000, and (c) 15,000

What will be an ideal response?

Economics

The sum of past federal budget deficits is the:

a. GDP debt. b. trade debt plus GDP. c. national debt. d. Congressional debt.

Economics