Rational expectations are forecasts
a. that, while not necessarily correct, are the best that can be made given the available data.
b. that are technically correct.
c. that accurately predict the short-term trade-off between inflation and unemployment.
d. made by economists using the most sophisticated econometric models.
a
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Which of the following factors would economists consider "key" to economic development?
A) policies that promote consumption expenditures by households B) establishing a system of property rights C) expansionary monetary policy D) All of the above are correct.
The perfectly competitive widget industry is in long-run equilibrium. A profit-maximizing manufacturer receives total revenue of $55,000. He uses his labor, $15,000 worth of wire, and $15,000 worth of steel to make the widgets. The manufacturer
A. is earning an economic profit of $25,000. B. must have an opportunity cost of labor of less than $25,000. C. must have an opportunity cost of labor of exactly $25,000. D. must have an opportunity cost of labor of more than $25,000.