Question

Question:

Question 5 (1 point)

According to the rational expectations theory,

Question 5 options:

A) sticky prices and wages are the primary source of short-run unemployment.

B) only unanticipated policy changes can affect output and employment.

C) the economy always self-corrects to full employment with little or no inflation.

D) real wages may vary widely in the long run.

Question 6 (1 point)

In 1962, President Kennedy persuaded U.S. steel manufacturers to lower their prices. This technique of verbally pressuring unions or businesses without legislation is called

Question 6 options:

A) a wage and price guideline.

B) a wage and price control.

C) jawboning.

D) an unfair business practice.

Question 7 (1 point)

In the United States, the most recent use of wage and price controls occurred during the

Question 7 options:

A) Nixon administration.

B) Carter administration.

C) Reagan administration.

D) Clinton administration.

Question 8 (1 point)

Suppose the economy has a problem with inflation. An economist recommends that the government cut marginal tax rates and reduce regulation. This economist's recommendation is consistent with the

Question 8 options:

A) montarist model.

B) Keynesian model.

C) supply-side model.

D) rational expectations model..

Answer 1

Q5

According to rational expectations, only unanticipated policy changes can affect output and employment.

the correct option is (B)

Q6

In 1962, President Kennedy persuaded US steel manufacturers to lower their prices. This technique is called jawboning also known as moral suasion is an unofficial technique; using public appeal to influence the actions especially of business and labor leaders.

the correct option is (C)

Q7

In the US, the most recent use of wage and price control occurred during Nixon administration.

the correct option is (A)

Q8

Suppose the economy has a problem with inflation. An economist recommends marginal tax and regulation should be reduced implies the recommendation are consistent with Supply-side economics model.

the correct option is (C)