According to the rational expectationists,
A. even if there were a recession or substantial inflation, the best government policy would be to do nothing.
B. the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply, lowering the natural level of real GDP.
C. at best, government anti-recessionary policies would have no effect whatsoever.
D. All of the choices agree with the thought of rational expectationists.
D. All of the choices agree with the thought of rational expectationists.
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Explain the relationship(s) between full employment, cyclical unemployment, the natural unemployment rate, and potential GDP
What will be an ideal response?
Mr. Smith wants to buy a house in a certain neighborhood that he thinks is ideal for an elderly, single man like himself
However, before buying the house, he consults his friend who lives in the same neighborhood and thinks that it is the ideal place for him. This is an example of a(n) ________. A) confirmation bias B) attenuation bias C) attentional bias D) distinction bias
Governments sometime create an excess demand for a product by setting a maximum price that is less than the equilibrium price, resulting in a permanent excess demand for the product. This is known as a price floor.
Answer the following statement true (T) or false (F)
Consider the demand curve below. If area 0ABC is smaller than area 0DEF, it suggests that if the price increases from D to A, then total revenues of sellers will:
A. Increase
B. Decrease
C. Remain constant
D. Equal zero