Under the Rational Expectations Hypothesis, If Wages Adjust Rapidly to New

question 276

Multiple Choice

Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, the only time that changes in government policies have real effects is when

• A) the changes are unanticipated.
• B) the changes involve fiscal policy.
• C) the changes involve monetary policy.
• D) the changes affect aggregate demand.

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Definitions:

Infant Language Development

The process by which infants acquire the capacity to understand and produce spoken language during the first few years of life.

University of British Columbia

A public research university located in British Columbia, Canada, known for its diverse programs and research initiatives.

First Word

The initial stage in language development, typically occurring in infants and young children, marking the beginning of verbal communication.

Linguistic Relativity Hypothesis

The theory that the structure of a language influences its speakers' worldview or cognition.