The rational expectations hypothesis indicates that a monetary policy designed to alter real Gross Domestic Product (GDP) will fail unless
A. changes in the money supply are completely anticipated.
B. there are unanticipated changes in the money supply.
C. labor unions have long-term contracts.
D. wages and prices are flexible.
Answer: B
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When water cannot be traded among current and potential users, then
a. each user will take more care to conserve, because added water cannot be obtained. b. users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs. c. efficiency improves, as dry years can be better anticipated and planned for, and every user knows the quantity that will be available. d. water will not flow to its highest valued uses, and some users will use water for relatively low-valued uses, because they cannot gain by selling it to others.
Which of the following is correct?
a. Workers determine the supply of labor, and firms determine the demand for labor. b. Workers determine the demand for labor, and firms determine the supply of labor. c. The labor market is a single market for all different types of workers. d. The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.