Rational expectations involve:
a. forecasts that are technically correct
b. forecasts that, while not necessarily correct, are the best that can be made given the available data.
c. forecasts that accurately predict the short-term future for wages and prices.
d. forecasts made by economists based on sophisticated econometric models.
b
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An increase in government spending will shift the aggregate demand curve to the left
Indicate whether the statement is true or false
Which of the following might explain why the government would create a price floor for a certain good?
a. The equilibrium price that would result in the market would be considered too high b. The equilibrium price that would result in the market would be considered too low c. The equilibrium quantity that would result in the market would be considered too high d. The equilibrium quantity that would result in the market would be considered too low e. The market will never achieve equilibrium on its own