The hypothesis that people believe the best indicator of the future is the recent past is known as:
a. rational expectations.
b. adaptive expectations.
c. lagged expectations.
d. trend expectations.
b
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When a man with a lawnmower in his trunk stops at Bill's house and offers to mow Bill's yard, economists assume the man
A) expects to be made better off by mowing Bill's yard for a fee. B) is desperate. C) is being exploited. D) both A and B.
If the demand curve is vertical a rightward shift of the supply curve will lead to
A) an increase in quantity supplied. B) an increase in quantity demanded. C) a decrease in quantity demanded. D) a decrease in price.
Each firm under monopolistic competition produces a unique product which does not have a close substitute
a. True b. False Indicate whether the statement is true or false
When the Federal Reserve purchases a U.S. Treasury bond for $1 million by writing a check, when the check returns, the Fed's balance sheet will show:
A. only an increase in assets of $1 million. B. only an increase in liabilities of $1 million. C. an increase in assets and liabilities of $1 million. D. an increase in assets and a decrease in liabilities of $1 million.