Even If People Have Rational Expectations

question 47

Multiple Choice

Even if people have rational expectations,

• A)unannounced changes in monetary policy can never affect output
• B)unemployment can never go below its natural rate
• C)income tax cuts will have a permanent effect on output
• D)supply shocks will not affect output or pries as long as the central bank accommodates them
• E)money supply changes can affect real output if individuals mistake movements in absolute prices for relative price changes

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Definitions:

Pragmatic Speech

The aspect of language use that focuses on practical and social communication skills, such as taking turns in conversation.

Overextension

A language development error where a child applies a word too broadly to objects that do not fit that word's meaning.

Referential Style

A mode of communication primarily concerned with conveying information and facts.

Telegraphic Speech

A stage in language development where young children speak in short, simple combinations of words that convey a clear meaning, resembling telegraphic sentences.