You hear an economist state the following: "The increase in the money supply will causes price to rise in the long run and will have no effect on output or any other real factors.". This economist is expressing the principle of _____

Rational expectations theory predicts that people's expectations of higher inflation will adjust immediately, leading to an immediate decrease in the actual inflation rate

a. True b. False Indicate whether the statement is true or false

Answer the following statements true (T) or false (F)

1) Exports are subtracted from imports in calculating U.S. GDP because exports are not available for domestic consumption. 2) The purchase of Walmart stock is a part of gross investment, but not of net investment. 3) The purchase of Walmart stock is a part of gross investment, but not of net investment. 4) Personal income usually exceeds disposable income. 5) Welfare payments to low-income families are included in national income.