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According to the Rational Expectations Approach ,If Policy Makers Consistently

question 103

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According to the rational expectations approach ,if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output,then people will not be able to anticipate the effects of this policy on the price level,unemployment,and the real output level.


Definitions:

Generalization

The process of formulating general concepts by abstracting common properties of instances.

Power

The capacity or ability to direct or influence the behavior of others or the course of events.

Entire Block

A term used in logic or mathematics to refer to the entirety of a set, structure, or piece of data.

Generalization

A broad statement or concept obtained by inference from specific cases, often used to make predictions or to simplify complex ideas.

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