According to rational expectations, expectations will only change in the event that ________
A) wealth changes
B) current income changes
C) permanent income changes
D) unanticipated new information arises
D
You might also like to view...
Why is the supply of oil more price elastic in the long run?
A) New deposits are found. B) Better extraction technology is developed. C) Firms have the ability to change the amount of all inputs. D) All of the above.
Which of the following is an example of a progressive tax?
a. The excise tax on cigarettes. b. The federal tax on gasoline. c. The federal personal income tax. d. All of these.
In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne. A razor cost $20 in 2009 and $25 in 2010 . A bottle of cologne cost $30 in 2009 and $40 in 2010 . Using 2009 as the base year, which of the following statements is correct?
a. For the typical consumer, the number of dollars spent on razors is equal to the number of dollars spent on cologne in each of the two years. b. The consumer price index is 310 in 2010. c. The rate of inflation is 29.17% in 2010. d. None of the above is correct.
A central bank that accommodates an aggregate supply shock
a. increases the money supply, making the inflation rate rise. b. increases the money supply, making the inflation rate fall. c. decreases the money supply, making the inflation rate rise. d. decreases the money supply, making the inflation rate fall.