Question 1: Which of the following theories of expectations holds that individuals usa all information available in forming expectations?
- Rational expectations theory
- Certainty equivalent theory
- Expected value analysis
- Adaptive expectations theory
Question 2. The only school of economics that could be construed as advocating big government are the :
- classicals
- keynesians
- montearists
- supply-sider
Question 3. Proponents of the monetarist approach to economic stabilzation think that the growth of the money supply should be equal to the:
- prime rate
- long-term average growth of real output
- real interest rate
- growth of federal expenditures
Question 4. A conclusion of the theory of rational expectations is that the impact of discretionary fiscal polices designed to shift the aggregate demand curve will:
- result in no net change in aggregate demand
- be anticipated and compensated for, causing no significant in real GDP or employment levels
- be completely opposite of the intended result
- be incorrectly evaluated by most economist