Multiple Choice
If all economic agents have rational expectations,
A) wages and prices must be perfectly flexible
B) imperfect competition will not lead to an undesirable outcome
C) involuntary unemployment cannot exist
D) some small menu cost of changing prices may still exist, preventing markets from clearing rapidly
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q7: Critics of the so-called DSGE models point
Q8: The rational expectations approach assumes that<br>A)people never
Q9: If we compare the classical model with
Q10: The real business cycle theory asserts that
Q11: The rational expectations equilibrium approach to macroeconomics<br>A)stresses
Q13: If we compare the model by Gregory
Q14: The random walk of GDP model asserts
Q15: The theory of the intertemporal substitution of
Q16: If we compare the frictionless neoclassical theory
Q17: The rational expectations equilibrium approach has influenced