The rational expectations hypothesis implies that when macroeconomic policy changes
A) the economy will become highly unstable.
B) the way expectations are formed will change.
C) people will be slow to catch on to the change.
D) people will make systematic mistakes.
B
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The intercept of a budget line measures the
a. amount of a good that a consumer will purchase b. maximum amount of a good that a consumer could purchase, given his consumption of some other good c. maximum amount of a good that could be consumed at given prices and income d. minimum amount of a good that could be consumed at given prices and income e. minimum consumption of a good consistent with utility maximization
Which of the following statements is an explanation for the law of increasing opportunity costs?
A. Many economic resources are better at producing one product rather than another B. The economy is employing all of its available resources C. In any economy, the state of technology is changing and resources are variable D. The economy is achieving productive efficiency by producing goods at the least cost