Rational expectations imply
a. markets always clear.
b. that prices are "sticky"
c. policy that is unpredictable is irrelevant to economic outcomes.
d. both a and c.
e. None of the above.
E
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Charlie's consumer surplus from the first slice of pizza he buys is greater than the consumer surplus from the second slice because of
A) decreasing marginal benefits. B) increasing marginal benefits. C) decreasing marginal costs. D) increasing marginal cost.
According to the saving and investment equation, if net foreign investment falls by $35 million,
A) domestic investment will fall by $35 million. B) national savings will rise by $35 million. C) national saving in excess of domestic investment will rise by $35 million. D) national saving in excess of domestic investment will decrease by $35 million.