Robert Lucas Argued That

question 68

Multiple Choice

Robert Lucas argued that

• A) workers and employers would adjust to macroeconomic inflationary policies designed to increase employment and thereby negate the policies.
• B) the opportunity cost of macroeconomic policies was always negative.
• C) workers were more important than employers in determining macroeconomic policy.
• D) macroeconomic policy would work only with a three-year lag.

---

Definitions:

Hurdle Rate

The minimum acceptable rate of return on an investment, used as a benchmark to assess its financial viability.

Borrowed Funds

Money obtained through loans or debt financing, which needs to be repaid over time, usually with interest.

Capital Budgeting

The process of planning and managing a company's long-term investments in major projects or assets.

Internal Rate

Generally refers to the internal rate of return (IRR), which is a metric used in capital budgeting to estimate the profitability of potential investments.