According to Rational Expectations Theory, Predictable Expansionary Monetary and Fiscal

question 42

Multiple Choice

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

• A) desirable because the result is to lower inflation.
• B) harmful because the only result is higher inflation.
• C) ineffective on the price level.
• D) successful in reducing unemployment in the long run.

---

Definitions:

Fair Value

What would be pocketed from an asset sale or the price to offload a liability during a methodical engagement with market individuals on the day of measurement.

Present Obligation

A duty or responsibility to act or perform in a certain way.

Goodwill

The intangible asset that arises when a buyer acquires an existing business but pays more than the fair market value of the net assets.

AASB 3

is the Australian Accounting Standards Board's standard on Business Combinations, detailing the accounting treatment for merging businesses, including the recognition and measurement of assets, liabilities, and any non-controlling interest.