When expectations are rational,
A) a foreseen expansionary policy action does not alter output.
B) there cannot be any inflation.
C) a foreseen expansionary policy action changes output.
D) there is zero unemployment.
Correct Answer:
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Q18: In the new classical view,an anticipated decrease
Q19: According to new classical model,real wages
A)rise when
Q20: Discuss the new classical critique of Keynesian
Q21: In the new classical model,stabilization policies
A)cannot affect
Q22: Monetarists and Keynesians agree that expectations are
A)backwards-looking.
B)rational.
C)unstable.
D)forwards-looking.
Q24: Keynesians disagree with the new classical model
Q25: In the rational expectations model
A)markets are perfectly
Q26: If government policy makers become more secretive,then
Q27: According to the new classical theory,a monetary
Q28: Like the monetarists,new classical economists favor
A)money growth
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