Under the Adaptive Expectations Hypothesis, Which of the Following Is

question 40

Multiple Choice

Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?

• A) In the short run, the real rate of output will be unaffected, but in the long run, it will increase.
• B) In the short run, the real rate of output will increase, but in the long run, it will be unchanged.
• C) There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher.
• D) In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.

---

Definitions:

Negative Announcement

A negative announcement communicates unfavorable news or decisions, which can include changes in policies, layoffs, or the cancellation of events.

Direct Message

Private communication between users on a social media platform that is not visible to others.

Negative Comments

Remarks or feedback that express criticism, disapproval, or a pessimistic viewpoint.

Bad News

Information that is unpleasant, unwelcome, or disheartening and potentially has a negative impact on the receiver.