Rational expectations theory is based on the assumption that
A) wages and prices are flexible upward but inflexible downward.
B) both product and resource markets are very competitive.
C) product markets are competitive, but resource markets are monopolistic.
D) both product and resource markets are monopolistic.
Correct Answer:
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Q44: A coordination failure
A) is a real-business-cycle event.
B)
Q45: When most consumers and firms reduce spending
Q46: According to new classical economists, the
A) short-run
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Q48: New classical economists
A) stress the importance of
Q50: Rational expectations theory assumes that
A) people behave
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A) aggregate
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Q54: 
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