According to Friedman, in which of the following situations is the economy in long-run equilibrium?
A) The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent.
B) The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent.
C) The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent.
D) The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.
D
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Suppose that an individual consumes only two goods. What will happen to the individual if her last dollar spent on one good yields more marginal utility than that from another good?
What will be an ideal response?
The "rational terrorist" is one that
A. devotes scarce resources to achieving a goal. B. weighs the costs and benefits of a goal. C. has a political goal. D. does all of the above.