In the rational expectations model, government control over aggregate demand
A. can affect real output only if policies are unexpected.
B. has potential to change real output as long as aggregate supply is vertical.
C. gives it the ability to change real output and employment.
D. does not influence the economic behavior of individuals.
Answer: A
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All of the following result from an optimal level of conflict EXCEPT:
Suppose an increase in price decreases quantity demanded from 210 to 190. Using the mid-point formula, the percentage change in quantity demanded is:
A. 2 = 200 percent. B. 0.2 = 20 percent. C. 0.2 = 20 percent. D. 0.1 = 10 percent
Which of the following firms faces monopolistic competition?
a. A poultry farm selling eggs to different bakeries b. A fashion store selling clothes at an up-scale boutique c. A fruit-bowl shop at a local market d. A movie hall selling tickets in advance for an upcoming blockbuster
Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3 pounds of beef stew a month. If everything else is held constant, we know that
A) hamburger is an inferior good and beef stew is a normal good for Sarah.
B) hamburger is a normal good and beef stew is an inferior good for Sarah.
C) both hamburger and beef stew are normal goods for Sarah.
D) both hamburger and beef stew are inferior goods for Sarah.