Under Adaptive Expectations, the Short-Term Effect of an Unanticipated Shift

question 57

Multiple Choice

Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a

• A) temporary reduction in the unemployment rate.
• B) permanent reduction in the unemployment rate.
• C) temporary reduction in the inflation rate.
• D) permanent reduction in the inflation rate.

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Definitions:

Uniform Distribution

A type of probability distribution in which every outcome is equally likely, leading to a flat or constant probability denoted over an interval.

Electronics Test

A process or procedure used to assess the functionality and performance of electronic components or systems.

Uniform Distribution

A type of probability distribution in which all outcomes are equally likely, characterized by constant probability over its intervals.

Electronics Test

An examination or procedure designed to assess the functionality and performance of electronic devices.