According to rational expectations theory, instantaneous market adjustments make:
A. Expansionary economic policy more effective in increasing output
B. Expansionary economic policy ineffective in increasing output
C. Economic policy more rational and more stable
D. Economic policy less rational and less stable
B. Expansionary economic policy ineffective in increasing output
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Which of the following is a criterion by which Gordon judges the desirability of any given level of actual real GDP?
A) Actual real GDP is too low if it causes the unemployment rate to be higher than necessary. B) Actual real GDP is too high if it strains a nation's ability to produce and puts upward pressure on the inflation rate. C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate. D) All of the above.
Negative externalities are benefits that people lose in a transaction
Indicate whether the statement is true or false
If the market for wheat is in equilibrium, the quantity of wheat demanded will equal the quantity of wheat supplied
a. True b. False Indicate whether the statement is true or false
Most economies in the world are
a. traditional. b. market. c. command. d. mixed.