According to the rational expectations hypothesis, individuals form their expectations about future values of economic variables by all of the following EXCEPT

Calculate the relative price of a basket of goods sold in the United States and Japan in terms of dollars if the yen/$ exchange rate = 90. The basket costs $100 in the United States and ¥9,000 in Japan. The relative price is:

a. 0.9, which means the U.S. basket costs more. b. 1.1010, which means the Japanese basket costs more. c. 0.9, which means the Japanese basket costs more. d. 1.0, which means they both cost the same.

In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The rent ceiling leads to a

A) shortage of 1000 apartments. B) shortage of 2000 apartments. C) surplus of 1000 apartments. D) surplus of 2000 apartments.