If the rational expectation theory is accurate, equilibrium real GDP will change in the short run:
a. whenever the aggregate demand curve shifts
b. only if discretionary fiscal policy is used.
c. only if there is a shift in aggregate demand that could not have been predicted from the information available to the public.
d. only if discretionary monetary policy is used.
c
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The opportunity cost of a resource
a. includes both explicit and implicit cost b. includes explicit cost only c. includes implicit cost only d. is equal to the market price of the resource e. is not related to the market price of the resource
Which of the following offers theories to explain why the government, like the private sector, may also "fail"?
A. social economics B. public choice theory C. rational expectations theory D. Keynesian economics
What is the difference between economic and accounting profit? Why is a distinction between them important?
What will be an ideal response?
A private good is a good that:
A. is nonrival. B. is not excludable. C. is provided only by private sectors. D. is consumed by a single person or household.