According to the concept of rational expectations
a. budget deficits are irrelevant to output in the short-run.
b. higher deficits should increase output in the short-run if they are expected.
c. lower deficits can be used to stabilize output during expansions.
d. none of the above.
A
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Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers
What will be an ideal response?
A bond is a financial security that represents
A) the portion of profits paid to shareholders. B) ownership in a corporation. C) the interest rate paid on a share of stock. D) a promise to repay a fixed amount of funds.
Compared with the 19th century, during the colonial period technological changes that raised output relative to inputs:
a. were slow and steady. b. increased in the early part of the period, but fell off dramatically after 1643. c. remained minor and sporadic. d. increased dramatically after 1643.
When the government both provides a service and covers its costs through taxation,
a. the government has a strong incentive to supply consumers with desired goods at a low cost. b. consumers are in a weak position to either discipline the suppliers or alter the quantity or quality of the service provided. c. the invisible hand will direct decision makers toward the most efficient level of output. d. Consumers have strong incentive to be cost conscious.