If the public has rational expectations, an attempt to increase aggregate demand to stimulate the economy will:
a. be less inflationary in the short run than if the public alters their expectations slowly in response to changes in government policy.
b. be more effective if the public alters their expectations quickly in response to changes in government policy.
c. be ineffective if the shift
in aggregate demand is predictable.
d. all of the above.
c
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A decrease in the inflation rate will lead to a ________ nominal interest rate, which will ________ the debt-to-GDP ratio
A) higher; raise B) higher; reduce C) lower; raise D) lower; reduce
If the production possibilities frontier is a straight line,
a. its slope will equal -1 b. resources must not be used efficiently c. resources must be unemployed d. society must not be using the latest technology e. resources must be equally adaptable at producing either product
A country will gain relatively more from trade when
A) trade is regulated. B) the world price is close to the country's opportunity cost of the good. C) the world price is below the country's opportunity cost of the good. D) the world price is much greater than the country's opportunity cost for the good.
If the demand for online banking decreases, we would expect to see the
A. supply of workers that produce online-banking services to decrease. B. demand for workers that produce online-banking services to increase. C. supply of workers that produce online-banking services to increase. D. demand for workers that produce online-banking services to decrease.