The term rational expectations is most accurately associated with the notion that
A) economic policy is ineffective and should not be used in a discretionary way.
B) it is always possible to reduce inflation without recession by simply letting aggregate demand fall as it will do automatically.
C) tax adjustments have no effect, but changes in the money supply can stimulate growth in an economy.
D) people always use as much information as possible in forming and acting on their expectations of the future.
E) all of the above.
Correct Answer:
Verified
Q4: Interest rates in the United States have
A)
Q5: Roughly defined, the unemployment rate is
A) the
Q6: Potential GDP is a measure of
A) all
Q7: Which of the following is not discussed
Q8: With the presence of a short-run trade-off
Q10: The recession experienced in the United States
Q11: The real money supply
A) tends to grow
Q12: Let a price index increase from 136.2
Q13: When an economy turns into a recession
Q14: The dollar value, adjusted for changes in
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