If expectations are rational, can monetary and fiscal policy makers accurately control the effects their policies have on unemployment?
a. Yes, provided they announce policies in advance
b. Yes, both policies are effective in altering unemployment in the desired ways.
c. No, because these effects depend on whether and to what extent people are fooled by those policies.
d. No, only fiscal policy can alter unemployment.
c
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If the government decreases its purchases of goods and services by $12,000 and the MPS is 0.5, GDP and income will eventually decrease by
A) $2,400. B) $6,000. C) $24,000. D) $60,000.
In 2006, the Bank of Japan adopted a policy framework focusing on
A) expected inflation one to two years in the future. B) current inflation. C) maintaining a fixed exchange rate. D) the growth in the money supply.
Society can produce at a point outside the production possibilities frontier, but only if it is using all of its resources efficiently
a. True b. False Indicate whether the statement is true or false
The major difference between nominal GDP and real GDP is that
A. real GDP is the absolute value of goods and services and nominal GDP is a relative value. B. real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. C. nominal GDP is the market value and real GDP has been adjusted for inflation. D. real GDP is a relative value and nominal GDP is an absolute value.