If the Public Has Rational Expectations

question 89

Multiple Choice

If the public has rational expectations,

• A) the only effective policy would be one that is implemented by surprise.
• B) if the public incorrectly anticipates a given policy,there could be adverse results.
• C) if policymakers do not do what they say they are going to do,then there could be adverse results.
• D) a,b,and c
• E) none of the above

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Definitions:

Summate

To add together or accumulate to a total; in physiology, refers to the additive effect of repeated stimuli on a nerve or muscle.

Gray Matter

Regions of the brain and spinal cord with a high concentration of cell bodies, dendrites, and axon terminals of neurons, distinguished from white matter.

Cortex

The outer layer of the cerebrum in the brain, involved in many advanced brain functions, including memory, attention, perceptual awareness, and language.

Depolarization

A decrease in the difference in charge between the inside and outside of a cell's plasma membrane, often leading to nerve impulse transmission or muscle contraction.