Which of the following theories argues that people form the most accurate possible expectations about the future using all information available to them?
a. The theory of adaptive expectations
b. The theory of rational expectations
c. The theory of sticky wage
d. The theory of absolute advantage
b
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Endogenous variables tend to be less volatile than exogenous ones
Indicate whether the statement is true or false
The marginal revenue product is
A) the change in total output resulting from a one-unit change in variable output. B) the change in marginal output resulting from a one-unit change in variable input. C) the change in total revenue resulting from a one-unit change in variable input. D) the change in marginal revenue resulting from a one-unit change in variable input.
A trade deficit occurs when:
a. a country imposes a price floor on the good in which it has a comparative advantage. b. a country's imports exceed its exports. c. a country imposes a price ceiling on the good in which it has a comparative advantage. d. a country's exports exceed its imports. e. the domestic product market is in disequilibrium.
Which of the following is the most liquid form of asset?
a. Small time deposits b. Large time deposits c. Savings accounts d. Money market mutual fund (MMMF) balances e. Travelers' checks