The Integration of Expectations into Macroeconomic Analysis Indicates That

question 167

Multiple Choice

The integration of expectations into macroeconomic analysis indicates that

• A) fiscal policy is more potent than monetary policy.
• B) monetary policy is more potent than fiscal policy.
• C) once people come to expect a given rate of inflation, the inflation will neither stimulate real output nor reduce unemployment.
• D) higher rates of inflation will lead to lower rates of unemployment in the long run but not in the short run.

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Definitions:

Orthopnea

Difficulty breathing that occurs when lying down and is relieved by sitting up, often associated with heart failure.

Breathing

The process of taking air into and expelling it from the lungs, essential to supply the body with oxygen and remove carbon dioxide.

Upright Position

A body posture where an individual stands or sits straight, with the spine aligned vertically.

Diaphragm

A dome-shaped muscular partition separating the thorax from the abdomen in mammals, playing a major role in breathing.