If Expectations Are Adaptive,then What Is the Long-Run Danger of an Activist

question 20

Multiple Choice

If expectations are adaptive,then what is the long-run danger of an activist monetary policy?

• A) high inflation and high unemployment
• B) stagnant real gross domestic product (GDP)and high inflation
• C) underestimated inflation and high unemployment
• D) low real gross domestic product (GDP)growth and low unemployment
• E) sticky prices and high unemployment

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Definitions:

Evangelical Christians

A significant group within Christianity emphasizing the need for a personal relationship with Jesus Christ, the authority of the Bible, and the importance of spreading Christian beliefs.

Principle Of Freedom

A fundamental belief or value emphasizing the importance of liberty and autonomy for individuals or societies, including freedom of speech, association, and religion.

Phyllis Schlafly

An American conservative activist known for her opposition to the women's liberation movement and the Equal Rights Amendment during the 20th century.

Sunbelt

The label for an arc that stretched from the Carolinas to California. During the postwar era, much of the urban population growth occurred in this area.