The Lucas critique is an attack on the usefulness of
A) conventional econometric models as forecasting tools.
B) conventional econometric models as indicators of the potential impacts on the economy of particular policies.
C) rational expectations models of macroeconomic activity.
D) the relationship between the quantity theory of money and aggregate demand.
B
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It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary? I. That the firm seeks to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost
a. All of the above. b. I and II but not III and IV. c. I and III but not II and IV. d. I, II and III, but not IV.
All inferior goods have upward-sloping demand curves
a. True b. False Indicate whether the statement is true or false