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:

Hypotensive

Relating to or suffering from low blood pressure.

Pulse Grade

A scale used to measure the strength or amplitude of the heartbeat felt through the walls of peripheral arteries.

Wrist Blood Pressure Monitor

A portable device used to measure blood pressure, designed to be worn on the wrist for convenience.

Home

A place where an individual lives, often considered a place of residence or domicile.