The rational expectations hypothesis suggests that
A. anticipated fiscal and monetary policy actions are not effective in stabilizing the economy.
B. anticipated monetary policy actions are more powerful than fiscal policy actions.
C. fiscal policy actions only work when accompanied by changes in the money supply.
D. unanticipated fiscal policy actions are more powerful than monetary policy actions.
Answer: A
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If both supply and demand simultaneously decrease
A) the market clearing price definitely rises, and the equilibrium quantity definitely falls. B) the market clearing price definitely rises, and the effect on the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.
Suppose seller X is willing to sell one good X for $5, a second good X for $10, a third for $16, a fourth for $25, and the market price is $20 . What is seller X's producer surplus?
a. $15 b. $20 c. $22 d. $29