Statement I: a Monetarist Might Oppose the Use of Expansionary

question 205

Multiple Choice

Statement I: A monetarist might oppose the use of expansionary monetary policy to pull the economy out of a recession by arguing that the resulting increase in output and employment would be brief,but the resulting increased inflation would be a long-term problem.
Statement II: According to rational expectations theory,when people expect government to carry out a policy,the policy will have a greater effect on output and employment.

• A)Statement I is true and statement II is false.
• B)Both statements are true.
• C)Statement II is true and statement I is false.
• D)Both statements are false.

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Definitions:

Critical Thinking

The process of executing an impartial assessment and review of a problem to derive a reasoned judgment.

Smaller Steps

A method where tasks or goals are divided into more manageable, bite-sized portions to facilitate easier completion or understanding.

Musical Intelligence

The capacity to think in music and rhythms, to recognize musical patterns, and to compose and perform music.

Verbal/Linguistic Intelligence

The ability to effectively use language, both written and spoken, for expression and comprehension.