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:

Garbage

Refuse or waste material discarded by humans, typically consisting of everyday items like food waste, paper, and plastic.

Operant Conditioning

A procedure in teaching whereby the strength of a particular behavior is manipulated via reinforcements or penalties.

Reinforcers

Reinforcers are stimuli that increase the probability of repetition of the behavior they follow.

Desired Response

The specific behavior or outcome that an individual or entity aims to elicit through a particular action or stimulus.