In the permanent-income hypothesis incorporating rational expectations, the short-run MPC is high when changes in current income
A) are small.
B) are considered a good predictor of future income changes.
C) are considered a poor predictor of future income changes.
D) occur when the economy is nearing cyclical peaks or troughs.
B
Economics
You might also like to view...
Figure 7-9
Of the graphs in Figure 7-9, which represents average fixed cost?
A. 1 B. 2 C. 3 D. 4
Economics
How will a decrease in technology from a natural disaster such as a hurricane, ceteris paribus, affect an economy's production possibilities curve?
A. Result in a movement from inside the curve to a point on the curve. B. Shift the curve inward. C. Result in a movement along the curve. D. Shift the curve outward.
Economics