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:

Unemployment Rate

The proportion of the workforce that is unemployed and actively seeking work.

Statistics Canada

The national statistical office of Canada, responsible for producing statistics on the Canadian economy, society, and environment.

Hypothesis Test

A method in statistics used to determine if there is enough evidence to support or reject a proposed hypothesis.

Critical Value

A threshold in hypothesis testing that defines the boundary or cutoff point at which an observed test statistic is considered statistically significant.