The hypothesis that people combine the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes is the basis of the
A. short-run Phillips curve hypothesis.
B. demand-pull inflation hypothesis.
C. adaptive hypothesis.
D. rational expectations hypothesis.
Answer: D
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The labor force participation rate is the percentage of the adult population that is
A) employed. B) willing to work but unable to find jobs. C) unemployed. D) working or actively looking for work.
Income that is received as wages and is not adjusted for inflation is called
What will be an ideal response?
At very low levels of disposable income,
A. consumption is greater than disposable income. B. disposable income is greater than consumption. C. people save most of their incomes. D. consumption is negative.
An increase in the expected inflation rate causes the supply of bonds to ________ and the supply curve to shift to the ________, everything else held constant
A) increase; left B) increase; right C) decrease; left D) decrease; right