Economists Favoring the Rational Expectations Theory Maintain That

question 48

Multiple Choice

Economists favoring the rational expectations theory maintain that

• A)market participants plan counterstrategies to what the Fed is planning to do.
• B)the Fed has no real short-term effect on output and employment unless it truly surprises markets.
• C)market participants anticipate government policies.
• D)All of the choices are correct.

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Definitions:

Sodium Ions

Positively charged atomic particles of sodium, essential in the body for maintaining blood pressure and fluid balance, and facilitating nerve and muscle functions.

Axon

A neuron, or nerve cell, features a long, slender outgrowth which is primarily involved in sending electrical messages away from the neuron's main body.

Action Potential

A temporary reversal of electrical polarization of the membrane of a nerve cell or muscle cell, allowing for the transmission of signals.

Electrical Conduction

The movement of electrically charged particles through a transmission medium.