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According to the Rational Expectations Approach ,If Policy Makers Consistently

question 103

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According to the rational expectations approach ,if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output,then people will not be able to anticipate the effects of this policy on the price level,unemployment,and the real output level.


Definitions:

Sensation

The process by which sensory receptors and the nervous system receive and represent stimulus energies from our environment.

Perception

The process of recognizing, organizing, and interpreting sensory information in order to represent and understand the environment.

Sense Organs

Specialized structures in the body that provide organisms the ability to process and respond to external stimuli.

Sensations

The process of detecting physical stimuli from the environment and converting them into neural signals.

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