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
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.
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
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
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.