The So-Called DSGE Models Assume That

question 50

Multiple Choice

The so-called DSGE models assume that

• A)what happens in the future depends to a large degree on the decisions that economic agents make in the present
• B)people have rationally designed long?term plans and adapt fairly easily to unexpected shocks to the economy
• C)markets tend to clear even though they are not always all perfectly competitive
• D)the forward?looking behavior of economic agents is the result of their rational expectations
• E)all of the above

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at various price levels, holding all other factors constant.

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply at those prices.

Graph

A visual representation of data or mathematical functions using a system of coordinates or other symbols.

Line

In geometry, a line is an infinitely thin, infinitely long collection of points extending in two opposite directions.