According to the Theory of Rational Expectations

question 89

Multiple Choice

According to the theory of rational expectations,

• A)workers' experience tells them that government action to lower unemployment will not affect inflation.
• B)consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects.
• C)policy goals can be achieved easily in the short run.
• D)workers' wage demands include anticipated inflation.
• E)expansionary monetary policy will lead to permanent interest rate declines.

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Definitions:

Obsessive-Compulsive

A mental disorder characterized by intrusive thoughts (obsessions) that lead to repetitive behaviors (compulsions).

Psychopaths

Individuals who exhibit a long-term pattern of manipulating, exploiting, or violating the rights of others, often without any remorse.

Heightened Ability

An enhanced or increased skill set beyond the average level, often specific to a particular function or activity.

Obsessive-Compulsive Personality

A behavioral disorder marked by an ongoing obsession with being orderly, perfect, and in control, which negatively impacts their ability to be flexible, open, and efficient.