If Firms and Workers Have Rational Expectations,including Knowledge of the Policy

question 123

Multiple Choice

If firms and workers have rational expectations,including knowledge of the policy being used by the Federal Reserve,the short-run Phillips curve will be

• A)negatively sloped.
• B)positively sloped.
• C)vertical.
• D)flatter in the long run than it is in the short run.

---

Definitions:

Depression

A mental health disorder marked by pervasive feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Mental Illness

A broad range of conditions that affect mood, thinking, and behavior, often requiring medical evaluation and intervention.

Psychologist

A professional who studies cognitive, emotional, and social processes and behavior by observing, interpreting, and recording how individuals relate to one another and to their environments.

Medical Doctor

A qualified practitioner of medicine; a physician.