A decrease in the interest rate reduces the opportunity cost of holding money

According to the theory of rational expectations,

a. workers' experience tells them that government action to lower unemployment will not affect inflation. b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects. c. policy goals can be achieved easily in the short run. d. workers' wage demands include anticipated inflation. e. expansionary monetary policy will lead to permanent interest rate declines.

When accounting profits are positive, economic profits could be:

A. positive. B. negative. C. zero. D. All of these are possible.