When studying human behavior, economists assume rational self-interest. This means that:
A. People make decisions based on some desired outcome
B. People are quite selfish, and are not concerned about others
C. People always make the right decisions
D. People have all the information they need to make a decision
Answer: A
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The growth of clothing exports originating in Bangladesh is the result of the
A) high productivity of workers in Bangladesh. B) low wages in Bangladesh. C) low productivity of workers in other countries. D) low productivity of workers in Bangladesh in industries other than those that produce clothing for export. E) high wages in other countries.
Refer to the above figure. The rational expectations hypothesis implies that an anticipated decrease in aggregate demand from AD2 to AD1 will
A) move the economy from b to c. B) move the economy from b to a. C) move the economy from c to a. D) shift the aggregate supply (AS) curve to the left.