If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will
a. ignore the policy until it exerts an observable impact on prices, output, and employment.
b. quickly take steps to adjust their decision making in light of the more expansionary policies.
c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy.
d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.
B
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Intraindustry trade is most common in the trade patterns of
A) developing countries of Asia and Africa. B) developed countries of Western Europe. C) all countries. D) None of the above.
Economies of scale are followed by diseconomies of scale
Indicate whether the statement is true or false
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
What is the most likely reason that snack foods sold in vending machines are so much more expensive than snack foods sold in grocery stores?
A. Snack foods sold in vending machines come in smaller packages, so the per-package costs are higher. B. Grocery stores buy in bulk, while vending machine companies tend to buy in smaller quantities. C. People who purchase snack foods from vending machines tend to have less elastic demand for snack foods. D. Owners of vending machine companies are greedier than owners of grocery stores.