The Reason for Different Effects of an Anticipated Fiscal Policy

question 63

Multiple Choice

The reason for different effects of an anticipated fiscal policy on the full-employment output in the Keynesian and Classical models is

• A)the Keynesian model assumes perfect insight,but the Classical model assumes rational expectations.
• B)the Keynesian model assumes rational expectations,but the Classical model assumes perfect insight.
• C)the Keynesian model assumes perfect insight,but the Classical model assumes rational
• D)contrary to the Classical model,the Keynesian model assumes that policy has no wealth effect.

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