Which of the following statements was probably made by an adherent of rational expectations?
a. It is rational to pursue any full employment policy because more employment is better than less
b. Unemployment is clearly a case of market failure.
c. Programs designed to stimulate employment will only stimulate the price level with no employment gain.
d. It is inhumane to have a single person unemployed whatever the inflation cost.
c
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Part-time workers for noneconomic reasons are people who
A) work less than 35 hours a week but would like to work more than 35 hours a week. B) work more than 35 hours a week but would like to work less than 35 hours a week. C) have lost their jobs within the last four weeks and are seeking another job. D) do not want to work full time. E) are discouraged workers.
Suppose that the production function for the economy is Y = AK0.2L0.8. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 1, real GDP is
A) $13,195.08. B) $16,000.00. C) $16,946.34. D) $28,000.00.
Michael spends $10 a month on Pez dispensers and Superman action figures. His marginal-utility-to-price ratio for the Pez dispensers is 40, while his marginal-utility-to-price ratio for Superman action figures is 47 . Explain why Michael is not maximizing his utility and how can he change his behavior to increase his utility?
When there is a positive externality associated with the watering of one's lawn, the free market results in:
a. not enough lawn watering. b. too much lawn watering. c. the socially optimal level of lawn watering. d. people watering each other's lawns. e. government subsidies for lawn watering.