Starting from an initial long-run equilibrium, under the rational expectations hypothesis, an anticipated shift to a more expansionary policy will increase:
A. prices but not real output in the short run.
B. real output but not prices in the short run.
C. real output in the long run but not in the short run.
D. real output in both the long run and the short run.
Answer: A
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The economic benefit to immigrating workers is:
a. political freedom and ideological peace. b. living in a nation where they do not have to pay taxes and receive many free social services. c. the chance to be free from discrimination and poverty. d. the present value of higher wages minus the value of the costs involved with the immigration process.
Of the following, the best example of firm that might operate in a contestable market is a
A) cable TV company. B) wheat farmer. C) ship owner operating on a major waterway. D) private college operating in a state with many public colleges.