Assume Individuals Consider Only the Short Run Effects of Changes

question 50

Multiple Choice

Assume individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates.Suppose individuals expect future taxes to decrease.Given this information,individuals will expect

• A)an increase in the expected future interest rate and no change in expected future output.
• B)an increase in the expected future interest rate and an increase in expected future output.
• C)an increase in the expected future interest rate and a reduction in expected future output.
• D)an increase in the expected future interest rate and an ambiguous effect on expected future output.

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Definitions:

Death Rates

The number of deaths per unit of population in a given time period, often used as an indicator of health and well-being in a community.

Birthrates

The ratio of live births in an area to the population of that area; expressed per 1000 population per year.

Infant And Child Mortality

The death rate of infants and children under a certain age, often used as an indicator of health and development in a population.

Total Fertility Rate

Total fertility rate is the average number of children a woman would have over her lifetime, given current birth rates.