Adding the assumption of pure competition and complete flexibility of all prices and wages to the rational expectations hypothesis yields a theory that provides support for
A. discretionary policy making.
B. passive policy making.
C. irrelevant policy making.
D. active policy making.
Answer: B
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If a small change in the x variable results in a large change in the y variable, the curve will be
A) positively sloped. B) negatively sloped. C) stee
Any combination of two goods that lies within the production possibilities frontier
A) is currently impossible to produce. B) is currently possible to produce. C) represents a more efficient combination of output than anything lying beyond the frontier. D) represents a more efficient combination of output than anything lying on the frontier.
A European option can only be exercised on the final day, the expiration date
Indicate whether the statement is true or false
The distribution of income in a market economy is determined by
a. the level of employment and prices of the factors of production. b. the prices of factors of production. c. largely unknown forces which economists seek to discover. d. decisions of government offices related to distribution.