Please identify each statement as true or false if the theory of rantional holds. Using complete information about only the past, agents form their most accurate expectations about the future. Long economic adjustments take the exact time that agents predicted. Aggregate supply is vertical over time. Using all the information currently available, agents form their most accurate expectations about the future. Price adjustments take less time than people predicted. Fiscal policy, like tax cuts, is highly ineffective. Price adjustments happen faster than when prices are "sticky". Answer Bank

1: b     the use of non-standard grammar

2: c     strong and willful.

its correct i took the test have a nice day: )

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answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.