The main criticism leveled at the rational expectations school of economic thought is that
A. they assume too much influence due to monopoly power.
B. they just go too far in ascribing rationality to the general population.
C. the assumption that the velocity of circulation is predictable in the short run is not borne out by the facts.
D. the assumption that labor union contracts create a rigid wage structure is unrealistic.
B. they just go too far in ascribing rationality to the general population.
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All else equal, compared to small-budget items such as paper towels, the price elasticity of demand for big-ticket items such as refrigerators is ________:
A. equal B. very low C. lower D. higher
For a perfectly competitive firm with a known marginal cost and random demand, as the expected marginal revenue increases, the profit-maximizing quantity ________.
A) approaches zero B) increases C) does not change D) decreases
Which of the following is true" a. To choose is to lose
b. Scarcity forces us to compete, but not to choose. c. Scarcity forces us to choose, but not to compete. d. Economic principles would be irrelevant if scarcity was eliminated.
What may be the reasons that explain the observation that during periods of hyperinflation economic growth actually slows or even contracts?
What will be an ideal response?