If Expectations Are Formed Rationally,wages and Prices Are Completely Flexible

question 8

Multiple Choice

If expectations are formed rationally,wages and prices are completely flexible in both the short run and the long run,and policy is correctly anticipated,increases in aggregate demand will stimulate the economy to higher levels of Real GDP in

• A) the short run or the long run.
• B) neither the short run nor the long run.
• C) the short run,but not in the long run.
• D) the long run,but not in the short run.

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Definitions:

Professional Negligence

The failure of a professional to perform their services with the skill and care that should be exercised by competent professionals in the same field, leading to harm.

Nonclients

Individuals or entities that have not entered into a professional service relationship with certain professionals, such as lawyers or accountants, and consequently, the professional does not owe them the same duty of care.

CPA Liable

Refers to situations where a Certified Public Accountant is held legally responsible for their actions or omissions in the course of their professional duties.

Audit Negligently

Performing an audit with a lack of care or in violation of the standards of the auditing profession, often leading to incorrect or misleading results.