According to Rational Expectations Theory, Discretionary Monetary and Fiscal Policy

question 36

Multiple Choice

According to rational expectations theory, discretionary monetary and fiscal policy will be ineffective primarily because of the

• A)successes of macroeconomic policymakers
• B)inability of policymakers to time decisions properly.
• C)reaction of the public to the expected effects of policy changes.
• D)slow impact of policy to stimulate changes in real output and employment.

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Definitions:

Grounding Connection

An electrical connection made to the earth or another large conducting body to establish a reference potential for circuitry.

Metal Enclosure

A protective casing made of metal used to house and protect electrical or mechanical equipment from environmental conditions, interference, or damage.

Reverse-Bias

A condition in semiconductor devices where the voltage applied is opposite in direction to the forward-bias, reducing the flow of current.

Voltage Spikes

Brief, transient voltages significantly higher than the normal power line voltage, which can potentially damage electronic equipment.