If Firms Have ________ and If They Set Prices and Wages

question 96

Multiple Choice

If firms have ________ and if they set prices and wages on this basis, then prices and wages will, on average, be set at market-clearing levels.

• A) negative inventories
• B) rational expectations
• C) excess capacity
• D) no competition

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Definitions:

Population Proportions

Refers to the share or percentage of a specific subgroup within the overall population.

Variance

Variance quantifies the spread of data points around the average value, showing the extent of their dispersion.

Sample Proportions

The percentage of times a characteristic occurs in a sample as compared to the total sample size.

Population Variances

A measure of dispersion that indicates how much individual members of a population deviate from the population mean.