In a market undergoing technological change, firms that
A) adopt the new technology temporarily incur an economic loss.
B) adopt the new technology temporarily make an economic profit.
C) do not adopt the new technology temporarily make an economic profit.
D) do not adopt the new technology increase their market share.
E) do not adopt the new technology continue to make a normal profit.
B
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Both adaptive expectations and rational expectations are prone to error (a discrepancy between the expectation and the actual experience). In each case, how does error affect the formation of new expectations?
What will be an ideal response?
The Monetary Control Act of 1980:
a. extended the Fed's authority to impose required-reserve ratios on all depository institutions. b. excluded the required-reserve ratios as an instrument of short-term policy. c. provided the Fed with the authority to use open market operations. d. all of the above. e. none of the above.