The rational expectations hypothesis indicates that a monetary policy designed to alter real Gross Domestic Product (GDP) will fail unless
A) changes in the money supply are completely anticipated.
B) labor unions have long-term contracts.
C) the government's budget is not in deficit.
D) changes in the money supply are unexpected.
D
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Specialization and international trade lead to
A) an outward shift in the production possibilities curve. B) an inward shift in the consumption possibilities frontier. C) a lower opportunity cost of domestic production of all goods. D) an enhanced level of consumption.
According to Walton and Rockoff, the primary reason the Federal government failed to build an adequate highway system before the Civil War was
a. the technology was not available. b. the canal craze diverted attention. c. rivalries among different sections of the country stalled legislation. d. the teachings of Adam Smith were taken too literally.