A Conclusion of the Theory of Rational Expectations Is That

question 102

Multiple Choice

A conclusion of the theory of rational expectations is that the impact of discretionary fiscal policies designed to shift the aggregate demand curve will

• A)result in no net change in aggregate demand.
• B)be anticipated and compensated for,causing no significant change in real GDP or employment levels.
• C)be completely opposite of the intended result.
• D)be incorrectly evaluated by most economists.
• E)cause potential GDP to increase.

---

Definitions:

Social Cognitive Theory

A theory in psychology that posits that learning occurs in a social context with a dynamic and reciprocal interaction of the person, environment, and behavior.

Albert Bandura

A prominent psychologist known for his work on social learning theory and the concept of self-efficacy.

Self-efficacy

A person's belief in their ability to succeed in specific situations or accomplish a task, which can play a significant role in how goals, tasks, and challenges are approached.

Mastery Orientation

An approach to learning where the focus is on gaining knowledge or skill and understanding the task rather than on outward signs of success or comparison to others.