Which of the following economic theories take into account the rational expectations of people in the economy?
a. Traditional Keynesian economic theory
b. Monetarist economic theory
c. New classical economic theory
d. Classical economic theory
e. New Keynesian economic theory
c
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In the long run, new firms enter a perfectly competitive market when
A) normal profit is greater than zero. B) economic profit is equal to zero. C) normal profit is equal to zero. D) economic profit is greater than zero. E) the existing firms are weak because they are incurring economic losses.
Suppose the U.S. dollar price of the Euro falls. This means that
A) the U.S. exchange rate has risen and the U.S. dollar buys more euros. B) the U.S. exchange rate has risen and the U.S. dollar buys less euros C) the U.S. exchange rate has fallen and the U.S. dollar buys more euros. D) the U.S. exchange rate has fallen and the U.S. dollar buys less euros.