The Main Policy Conclusion of the Rational Expectations School Is

question 22

Multiple Choice

The main policy conclusion of the rational expectations school is

• A)fiscal policy lags are so long and variable that such policy is worthless,but monetary policy can be helpful
• B)monetary policy lags are so long and variable that such policy is worthless,but fiscal policy can be helpful
• C)both monetary and fiscal policy can be helpful if policy makers correctly anticipate the plans of firms and households
• D)both monetary and fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers
• E)neither monetary nor fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers

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Definitions:

Express Warranty

A clearly stated promise or guarantee by a seller about the quality or functionality of a product.

Basis of the Bargain

The foundation or crucial terms agreed upon in a contract that are a major reason one party enters into the agreement.

Bargain

An agreement between two or more parties where each party gives something of value to the other(s) in exchange for goods, services, or other benefits.

Implied Warranty of Merchantability

A legal presumption in sales law that goods sold by a merchant meet certain quality standards and are fit for the general purpose for which they are sold.