The hypothesis that people use all available information to predict the future is known as:
a. rational expectations.
b. adaptive expectations.
c. lagged expectations.
d. trend expectations.
a
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Refer to the scenario above. Which investment option will a risk-averse individual choose?
A) He will choose to invest in Option A. B) He will choose to invest in Option B. C) He will choose to invest in Option C. D) He will be indifferent in investing in any of the three options.
To make the calculation of real GDP more accurate, in 1996 the BEA switched to using
A) base-year prices. B) chain-weighted prices. C) current prices. D) market prices.
If you want to know the present value of $5,000 received in one year, and the interest rate is 2 percent, what formula can you use?
A) Present value equals 1.02 divided by $5,000. B) Present value equals $5,000 times 0.02. C) Present value equals $5,000 times 1.02. D) Present value equals $5,000 divided by 1.02
When the real exchange rate rises
A) imports measured in terms of domestic output will rise. B) imports measured in terms of domestic output will fall. C) imports measured in terms of domestic output will never be affected. D) imports measured in terms of domestic output may rise or fall. E) imports measured in terms of foreign output will rise.