According to Adaptive Expectations Theory, Expansionary Monetary and Fiscal Policies

question 21

Multiple Choice

According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate are:

• A)useless in the long run.
• B)useless in the short run.
• C)ineffective on the price level.
• D)None of these.

---

Definitions:

Psychological Functioning

Refers to the cognitive, emotional, and behavioral capacities and behaviors of an individual, highlighting aspects such as perception, memory, and mental health.

Circadian Rhythms

Physical, mental, and behavioral changes that follow a roughly 24-hour cycle, responding primarily to light and darkness in an organism's environment.

Physiological Functioning

Refers to the normal and healthy operations of bodily organs and systems, which support life and maintain homeostasis.

Psychological Functioning

The way in which individuals' cognitive, emotional, and behavioral functions operate, often in the context of their well-being.