If People Do Not Always Make the Same Mistakes When

question 216

Multiple Choice

If people do not always make the same mistakes when forecasting the future, then

• A)rational expectations are irrational.
• B)the Fed can control monetary policy and determine real variables such as real GDP.
• C)the policy irrelevance theorem holds.
• D)fiscal policy is more effective than monetary policy at fine-tuning the economy.

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Definitions:

Refractory Period

The time right after a stimulus when a nerve or muscle cannot respond to additional stimulation.

Positive Charge

An electrical charge possessed by protons, which is opposite in sign to the charge carried by electrons.

Action Potential

A brief electrical impulse by which information is transmitted along the axon of a neuron.

Refractory Period

A time directly following stimulation in which a nerve or muscle is incapable of responding to more stimulation.