If rational expectations cause people's price expectations to be generally correct, active policy will influence the price level but not output
a. True
b. False
Indicate whether the statement is true or false
True
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The land of Mordor increases its capital stock. As a result, the long-run aggregate supply curve shifts ________ and so does the ________ curve
A) rightward; aggregate demand B) leftward; aggregate demand C) rightward; short-run aggregate supply D) leftward; short-run aggregate supply
The short-run Phillips curve intersects the long-run Phillips curve where
a. the actual rate of inflation equals the expected rate of inflation. b. the actual rate of unemployment equals the natural rate of unemployment. c. Both A and B are correct. d. None of the above is correct.
If the exchange rate between the yen and the dollar changes from 100 yen = $1 to 110 yen = $1, then:
A. the dollar has depreciated in value. B. U.S.-made goods will become less expensive to Japanese citizens. C. the dollar has appreciated in value. D. Japanese-made goods will become more expensive to U.S. citizens.
If the government imposes a maximum price that is above the equilibrium price,
A. demand will be greater than supply. B. the available supply will have to be rationed with a nonprice rationing mechanism. C. this maximum price will have no economic impact. D. quantity demanded will be less than quantity supplied.