If the public has rational expectations,
A) the only effective policy would be one that is implemented by surprise.
B) if the public incorrectly anticipates a given policy, there could be adverse results.
C) if policymakers do not do what they say they are going to do, then there could be adverse results.
D) a, b, and c
E) none of the above
D
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In an ultimatum game where the payoff totals $100 and is split in $1 increments, the rational amount for the proposer to offer and the responder to take is
A) $0. B) $1. C) $50. D) $100.
Suppose a goldsmith (banker) received an additional number of gold coins to put in his safe and had stopped making loans. What would be happening to his reserve ratio?
A. It would be rising. B. It would be falling. C. It would stay the same. D. There is not enough information to answer this question.
Explain why the real interest rate is the opportunity cost of loanable funds
What will be an ideal response?
Describe the main provisions of the Maastricht Treaty of 1991
What will be an ideal response?