Starting from an Initial Long-Run Equilibrium, Under the Adaptive Expectations

question 8

Multiple Choice

Starting from an initial long-run equilibrium, under the adaptive expectations hypothesis, a shift to a more expansionary policy will increase

• A) prices and unemployment in the long run.
• B) real output in the short run but not in the long run.
• C) real output in the long run but not in the short run.
• D) real output in both the long run and the short run.

Identify the characteristics and causes of the Internet bubble of 1995-2000.

Understand how the slope and intercept of the budget line relate to investor choices and the characteristics of risk-free and risky assets.

Analyze the effect of investor psychology on portfolio optimization and market outcomes.

Explain the role of public policy and behavioral economics in addressing issues of energy consumption and environmental impact.

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Definitions:

Media Richness

Denotes the capacity of a communication medium to effectively convey complex information in a detailed and comprehensive manner.

Uncertainty

The state of being uncertain, lacking definite knowledge or full assurance about future outcomes or situations.

Ambiguity

The quality of being open to more than one interpretation; lack of clarity or certainty in meaning.

Output

The amount of something produced by a person, machine, or industry.