In the rational expectations model, government control over aggregate demand
a. can affect real output only if policies are unexpected.
b. has potential to change real output as long as aggregate supply is vertical.
c. gives it the ability to change real output and employment.
d. does not influence the economic behavior of individuals.
a
You might also like to view...
Refer to Figure 26-8. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) lower interest rates. B) raise interest rates. C) raise income taxes. D) lower income taxes.
When the domestic currency depreciates, domestic goods become more expensive to foreign buyers
a. True b. False Indicate whether the statement is true or false
Compared to a proprietorship, an advantage of a partnership is
A. the ability to take advantage of greater specialization. B. the limited liability of the partners. C. that profits are not taxed twice. D. double taxation.
If, as a result of imperfect information, firms set their wage rates ________ the market clearing wage rate, there will be a shortage of workers.
A. above B. at C. below D. above or below