The "greater fool" theory assumes that
A) markets are efficient.
B) bubbles cannot exist in well-organized markets.
C) it makes sense for an investor to buy an asset as long as there is someone else to buy it later for a higher price.
D) bond market returns are always above stock market returns.
C
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Government certification of the weights and measures used in business can be justified because
A) no business operated for profit would have any interest in weighing and measuring accurately. B) people cannot be trusted. C) government officials, unlike private parties selling for profit, have no incentive to cheat. D) it reduces total transaction costs below what they would be if all individual buyers or sellers had to check for themselves.
The difference between the Keynesian and classical labor supply functions is that in the Keynesian version
a. workers know the real wage while in the classical system workers must form an expectation of the price level. b. workers must form an expectation of the price level while the workers know the real wage in the classical system. c. workers are assumed to be interested in the money wage while in the classical version workers know the real wage. d. labor supply depends on the actual real wage while labor supply depends on the expected real wage in the classical system.