Which of the Following Is NOT an Inference of the Rational

question 321

Multiple Choice

Which of the following is NOT an inference of the rational expectations hypothesis?

• A) Government policy actions have no real effects in the short run unless the actions are unanticipated.
• B) Government policy actions have no real effects in the long run.
• C) Government policy actions that are anticipated have no real effects in the short run.
• D) Government policy actions that are unanticipated have no monetary effects in the short run.

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Definitions:

Cost Of Goods Sold

Expenses directly linked to manufacturing the goods a business sells, which encompass materials and labor.

Rate Of Return

The increase or decrease in the value of an investment during a specific time frame, represented as a proportion of the original investment's price.

Investment

The allocation of resources, usually money, with the expectation of generating an income or profit.

Acid Test Ratio

A stringent indicator of a company's liquidity, measuring its ability to meet short-term obligations with its most liquid assets.