According to the Lucas Supply Function, in Combination with the Assumption

question 129

Multiple Choice

According to the Lucas supply function, in combination with the assumption that expectations are rational, change in government policy can affect real output only if

• A) the policy change is correctly anticipated by the public.
• B) the policy change is a surprise.
• C) the policy change is a mix of both fiscal and monetary policy changes.
• D) expansionary policy changes are made.

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Definitions:

Operant Conditioning

An educational practice that modifies the strength of a behavior through either positive stimuli or negative feedback.

Positive Reinforcer

An incentive that, if offered following an action, enhances the chance of that action being performed again.

Conditioning Perspective

A viewpoint in psychology that focuses on learning as the primary mechanism through which behaviors are acquired and modified.

Treat

To deal with or act towards someone or something in a specified manner, often with kindness or to provide medical care.