Which of the following events led to the crisis in macroeconomics and to the development of rational expectations theory?
A) the Great Depression
B) the stock market crash of 1987
C) the stock market speculative bubble of the late 1990s
D) stagflation in the 1970s
E) large budget deficits in the 1980s
D
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An aircraft company has signed a contract to sell a plane for $20 million. The firm buying the plane will pay for it in 5 annual payments (at year end) of $4 million
If the firm's cost of capital is 6%, what is the net present value of this payment?
When measuring the opportunity cost of taking a vacation to Europe, the money spent on the flight, hotels, and meals is
a. generally less than the opportunity cost of the vacation b. generally greater than the opportunity cost of the vacation c. generally equal to the total opportunity cost of the vacation d. equal to the total opportunity cost of the vacation only if the vacation was planned well in advance e. equal to the total opportunity cost of the vacation only if there was little advanced planning