A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as
A) active expectations. B) modern expectations.
C) rational expectations. D) adaptive expectations.
C
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When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy, then
A) inflation will be lower. B) output will be at its potential. C) output will be lower. D) inflation will not change. E) both A and B.
Oligopolies can end up looking like competitive markets if the number of firms is
a. large and they all cooperate. b. large and they do not cooperate. c. small and they all cooperate. d. small and they do not cooperate.
Which of the following is a problem when comparing GDPs per capita between nations?
a. Fluctuations in exchange rates affect differences in GDP per capita. b. GDP per capita fails to measure income distribution. c. All of the answers are correct. d. GDP per capita is subject to greater measurement errors for LDCs compared to IACs.
Figure 17-3
In , in the absence of trade, the domestic price of soybeans is Pn. If the world price of soybeans is Pw, which of the following will occur when the United States begins to trade internationally?
a.
The domestic price of soybeans will rise, and domestic consumption will fall.
b.
Both the domestic price of soybeans and domestic consumption will rise.
c.
Both the domestic price of soybeans and domestic consumption will fall.
d.
The domestic price of soybeans will fall, and domestic consumption will rise.