According to the theory of rational expectations, errors in predicting inflation will
a. be biased upward more often than not.
b. be purely random.
c. tend to be biased downward when inflation is rising, and tend to be biased upward when inflation is falling.
d. tend to be biased upward when inflation is rising, and tend to be biased downward when inflation is falling.
b
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Income and revenue from taxes have a specific relationship during recessions. What is it?
A) incomes fall, tax revenue increases B) incomes rise, tax revenue decreases C) incomes fall, tax revenue decreases D) incomes rise, tax revenue increases
East Asian economies have grown
A) rapidly because of high saving rates. B) rapidly despite a lack of property rights. C) slowly because of a lack of property rights. D) slowly because of low saving rates. E) rapidly because they virtually eliminated international trade.
Marginal-cost pricing, which is used to regulate a natural monopoly, leads to zero economic profit
a. True b. False Indicate whether the statement is true or false
Holding other factors constant, if growing concerns about job security raise precautionary saving, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. decrease; decrease B. increase; decrease C. increase; increase D. decrease; increase