Which of the following statements is true?
A. A political business cycle is one created by the incentive for politicians to make policies in accordance with benefit-cost analysis.
B. Adaptive expectations theory argues that the best indicator of the future is all of the available information.
C. Incomes policies tend to be very effective over time.
D. Incomes policies include jawboning, wage-price guidelines, and wage-price controls.
Answer: D
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The situation in which the marginal product of labor is greater than zero and declining as more labor is hired is called the law of:
a. negative response. b. inverse return to labor. c. diminishing returns. d. demand.
If the exchange rate for Micromania's micros to United States's dollars is 50 micros = $1, then micros have appreciated when the exchange rate becomes
a. 100 micros = $2 b. 100 micros = $1 c. 25 micros = $0.50 d. 25 micros = $0.25 e. 25 micros = $0.75