Government decisions tend to be biased toward actions that have
a. current costs and future benefits that are both easily observable.
b. future costs that are difficult to identify and current benefits that are easily observable.
c. future costs and future benefits that are both difficult to identify.
d. current costs that are easily observable and future benefits that are difficult to identify.
B
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If technological change increases the profitability of new investment for firms, then the ________ curve for loanable funds will shift to the ________ and the equilibrium real interest rate will ________
A) demand; right; rise B) demand; left; fall C) supply; left; rise D) supply; right; fall
According to rational expectations theory, predictable expansionary monetary and fiscal policies to reduce the unemployment rate are:
a. desirable because the result is to lower inflation. b. harmful because the only result is higher inflation. c. ineffective on the price level. d. None of these.