According to the Theory of Rational Expectations, an Announced Policy

question 39

Multiple Choice

According to the theory of rational expectations, an announced policy of reducing the rate of growth of the money supply will result in people:

• A)not changing their forecasts of inflation
• B)increasing their forecasts of expected inflation
• C)reducing their forecasts of expected inflation
• D)doing none of the above

---

Definitions:

Work Efficiency

The effectiveness with which job responsibilities and tasks are completed using the least amount of resources or time.

Task Identity

The degree to which a job requires completion of a whole and identifiable piece of work, contributing to a sense of achievement.

Complete Computer

involves all necessary components and systems working together efficiently to perform computing tasks.

Linking Rewards

The practice of connecting incentives or benefits to specified behaviors or achievements.