Assume Individuals Consider Only the Medium- Run Effects of Changes

question 9

Multiple Choice

Assume individuals consider only the medium- run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose individuals expect future government spending to increase. Given this information, individuals will expect:

• A) an increase in the expected future interest rate and an increase in expected future output.
• B) an increase in the expected future interest rate and a reduction in expected future output.
• C) an increase in the expected future interest rate and no change in expected future output.
• D) an increase in the expected future interest rate and an ambiguous effect on expected future output.
• E) an increase in the expected future interest rate and a constant expected future output.

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Definitions:

Technical Matters

Issues or aspects that are concerned with the practical, mechanical, or procedural side of a subject, often requiring specialized knowledge or skills.

Staffing

The process of hiring, positioning, and overseeing employees in an organization to ensure that it is adequately staffed with qualified individuals.

Monitoring Subordinate

The act of overseeing the performance and activities of employees or team members to ensure compliance with standards and objectives.

Contingency Leadership

A leadership theory that emphasizes the importance of situational factors, such as the organizational environment and the nature of the task, in determining the most effective leadership style.