The notion that expectations will be identical to optimal forecasts using all available information is known as ________
A) adaptive expectations
B) irrational expectations
C) rational expectations
D) tertiary expectations
C
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When bank deposits increase from $1 million to $2 million, banks' required reserves increase from $100,000 to $200,000. The required reserve ratio is ________
A) 10.0 B) 0.10 C) 1.00 D) 0.25
Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for $3. What is the value of marginal product from hiring the fourth worker?
A) $2,400 B) $840 C) $120 D) $60
In the New Keynesian open economy model
A) the nominal exchange rate is always fixed. B) prices are flexible. C) net exports depends on the relative price of foreign goods to domestic goods. D) the nominal exchange rate is always flexible.
The fact that individuals substitute away from a taxed activity creates _____
a. the excess burden of taxation b. the welfare cost of taxation c. deadweight loss of taxation d. all of the above e. a and b