The rational expectations perspective suggests that:
A. fiscal policy is more powerful than monetary policy.
B. monetary policy is more powerful than fiscal policy.
C. fiscal and monetary policy are not likely to achieve their stated aims.
D. fiscal policy works only to the extent that it is accompanied by fully anticipated changes in
the money supply.
C. fiscal and monetary policy are not likely to achieve their stated aims.
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For a perfectly competitive firm, the price of its good is equal to the firm's marginal revenue because
A) information about price changes is hard to come by for small sellers. B) price and marginal revenue are the same economic concepts. C) individual perfectly competitive firms cannot influence the market price by changing their output. D) the firm's total revenue cannot be changed by anything the firms can do. E) there are only a small number of firms in the market.
Which of the following is given in the video as an example of a negative real shock to the economy?
A. A technological advance that increases investment B. A rapid rise in the price of oil C. A decrease in consumer confidence D. A stretch of very bad weather