The proponents of adaptive expectations believe that:

a. there will be a substantial time lag before people anticipate the effects of a shift to a more expansionary macro-policy.
b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment.
c. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.
d. all of these are true.


d

Economics

You might also like to view...

If AD and AS increase at exactly the same rate, the result will be

a. demand-side inflation. b. supply-side inflation. c. falling prices. d. stable prices.

Economics

The demand for microwaves in a certain country is given by: D = 8,000 -30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, how many microwaves will be imported or exported?

A. 2,000 imported B. 2,000 exported C. 1,000 imported D. 3,000 exported

Economics

Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower

Economics

The beginning date of the recession of 2007-2009 has been determined by the

A. National Bureau of Economic Research. B. University Interscholastic League. C. Board of Governors of the Federal Reserve System. D. Council on Foreign Relations.

Economics