Inflationary tendencies and even hyperinflation in many Latin American countries have been exacerbated by the tendency of governments to
A) tax too heavily.
B) regulate too heavily.
C) print money to finance policies to stimulate the economy.
D) keep out foreign competition.
E) use industrial policies to foster growth.
C
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The rational expectations hypothesis is based on the assumption that
A) individuals combine effects of past policy actions with their own judgment about future policy effects and changes when forming their expectations. B) individuals adapt in response to past policy actions and changes without looking ahead when forming their expectations. C) firms pay above equilibrium wages to their employees. D) most firms operate in a less than competitive environment.
Other things remaining unchanged, which of the following is most likely to cause an increase in the demand for personal computers?
a. A reduction in the price of personal computers b. An increase in the supply of personal computers c. An increase in the cost of computer printing ink d. An increase in the number of computer manufacturers e. A requirement by universities that all students buy personal computers