Rational Expectation Theory Implies That Accurately Anticipated Change in Aggregate

question 85

Multiple Choice

Rational expectation theory implies that accurately anticipated change in aggregate demand:

• A)​will increase RGDP in the long run.
• B)​will affect RGDP and inflation only in the long run.
• C)​may affect RGDP but not nominal GDP.
• D)​will tend to be offset by the actions of input suppliers as they react to their inflation expectations.

---

Definitions:

Keystone Species

A species that plays a crucial role in maintaining the structure of an ecological community, affecting many other organisms in an ecosystem.

Proportionate

Being in correct relation or balance between parts in terms of size, quantity, or degree.

Abundance

The large quantity or concentration of something in a particular area or environment.

Edge Effect

The changes in population or community structures that occur at the boundary of two or more habitats, affecting biodiversity and ecological interactions.