In the Rational Expectations Model, Government Control Over Aggregate Demand

question 67

Multiple Choice

In the rational expectations model, government control over aggregate demand

• A)can affect real output only if policies are unexpected.
• B)has potential to change real output as long as aggregate supply is vertical.
• C)gives it the ability to change real output and employment.
• D)does not influence the economic behavior of individuals.

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Definitions:

Common Stock Account

An equity account on a company's balance sheet representing the amount of money that has been invested directly in the company by its shareholders in exchange for common stock.

$5 Par Value

A nominal or face value assigned to a share of stock, in this case, set at five dollars, used in certain financial calculations and legal paperwork.

$18 Per Share

A specific price value assigned to individual shares of stock, indicating the cost or value of a single share at a particular moment.

Treasury Stock

Shares that were once a part of the outstanding shares and have been repurchased by the company.