If the markets in the economy are characterized by rational expectations, then
A) predictable changes cause neither the AD nor the SAS curves to shift.
B) predictable changes in monetary policy are ineffective in changing output.
C) unpredictable monetary policy is ineffective in changing prices.
D) unpredictable fiscal policy is ineffective in changing prices.
A
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The marginal propensity to consume (mpc) is the:
A. percentage by which disposable income increases when consumption increases by 1 percent. B. amount by which disposable income increases when consumption increases by $1. C. percentage by which consumption increases when disposable income increases by 1 percent. D. amount by which consumption increases when disposable income increases by $1.
If resources are used efficiently, then ________
A) marginal social cost is minimized B) consumer surplus plus producer surplus is maximized C) consumer surplus equals producer surplus D) producer surplus is maximized
Governments around the world tend to auction quota licenses
A) never. B) seldom. C) often. D) always.
The main reason why the traditional classical school ceased to be widely accepted was that: a. it did not reflect the realities of the modern economy. b. when Keynes received the Nobel Prize, the academic establishment started believinghis ideas
c. it could not explain the persistence of the high levels of unemployment seen during the Great Depression. d. it was too abstract to be completely understood. e. it could not explain the relationship between inflation and unemployment.