Refer to the information provided in Figure 13.7 below to answer the question(s) that follow.  Figure 13.7 Refer to Figure 13.7. If the government regulates Armstrong Cable so they can earn only a normal return, the price would be set at

Compared to a cost plus incentive fee contract, the cost plus percentage fee contract has strong incentives to minimize costs

a. True b. False

When a person bases her future expectations for the economy on all available current data and her own judgment about future policy effects, this is known as

A) the policy irrelevance proposition. B) rational expectations. C) irrational expectations. D) the new classical theory.