Which of the following statements best describes the rational expectations hypothesis?
A) Individuals will not enter into long-term agreements unless they are certain about the payments they will receive.
B) It is likely that individuals will consistently make errors.
C) Individuals will make random errors, independent of previous errors.
D) It is reasonable to expect individuals to consistently underestimate the level of inflation.
C
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? Newspaper recycling has been highly successful—perhaps too successful, given that many households gather and return their newspapers to recycling centers. The amount of newspapers recycled has dramatically increased, along with the number of recycling plants. Yet newspapers prefer regular newsprint over recycled newsprint, so the demand for recycled newsprint has remained essentially unchanged. The result of this for the recycled newsprint market is
A. a decrease in the supply and a higher price for recycled newsprint. B. an increase in the supply and a lower price for recycled newsprint. C. an increase in the supply and a higher price for recycled newsprint. D. a decrease in the supply and an increase in the demand for recycled newsprint.
Despite the Obama administration's support of the Trans-Pacific Partnership (TPP), the AFL-CIO labor union has argued that the TPP will not
A) protect the environment. B) ensure safe imports. C) create jobs. D) all of the above
When people trade goods for money, money is being used as a medium of exchange
a. True b. False Indicate whether the statement is true or false
If a nation has an absolute advantage in the production of some commodity, it
a. can gain only if it has a comparative advantage in the commodity. b. may still gain from trade in the commodity. c. cannot gain from trade in the commodity. d. cannot gain unless it has an absolute advantage in every other commodity.