The Rational Expectations Hypothesis Implies That Discretionary Macropolicy May Be

question 18

Multiple Choice

The rational expectations hypothesis implies that discretionary macropolicy may be

• A) relatively effective in both the short run and long run.
• B) relatively effective in the short run but ineffective in the long run.
• C) relatively ineffective both in the short run and long run.
• D) effective in the long run since decision makers will continually make predictable, systematic errors.

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Definitions:

Union Density

A metric that represents the percentage of employed individuals who are members of a labor union.

Incredible Union Density

An unusually high level of membership in labor unions within a particular workforce or economy, implying strong collective bargaining power.

Aerobic Exercise

Exercise that uses the large muscle groups in continuous, repetitive action and increases oxygen intake and breathing and heart rates.

Weightlifting

A physical exercise involving the lifting of weights to improve strength and fitness.