Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output
b. higher prices and expansion in real output
c. no change in prices but an expansion in real output
d. no change in either prices or real output
A
You might also like to view...
The only type of business that faces limited liability is a corporation
Indicate whether the statement is true or false
Which of the following might be a method that the government could use to correct a negative externality?
A) an effluent fee on waste from the production of goods that create negative externalities B) government subsidies to producers of goods that create negative externalities C) financing additional production of goods that create negative externalities D) encouraging overallocation of resources of production of goods that create negative externalities
Between the 1880s and the early 21st century, U.S. productivity increased at a constant annual rate
a. True b. False Indicate whether the statement is true or false
Goods that are income elastic are often referred to as luxury goods
Indicate whether the statement is true or false