If the Public Has Rational Expectations, an Attempt to Increase

question 105

Multiple Choice

If the public has rational expectations, an attempt to increase aggregate demand to stimulate the economy will:

• A)​be less inflationary in the short run than if the public alters their expectations slowly in response to changes in government policy.
• B)​be more effective if the public alters their expectations quickly in response to changes in government policy.
• C)​be ineffective if the shift in aggregate demand is predictable.
• D)​all of the above.

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Definitions:

Marketing Strategy

A comprehensive plan formulated by businesses to achieve desired marketing goals, such as increasing market share or introducing new products.

CDI

An acronym that can refer to multiple meanings, such as Consumer Demand Index, indicating it is context-dependent but generally involves measurement or assessment in economic or marketing fields.

Above-Average Product Category Purchases

The act of buying more products or services from a specific category than the typical consumer within the same period.

Product Modification Strategy

A marketing strategy where existing products are modified or adapted to meet changing customer needs or to enter new markets.