According to the Theory of Rational Expectations, ____ Inflationary Expectations

question 29

Multiple Choice

According to the theory of rational expectations, ____ inflationary expectations encourage businesses and households to ____ their demand for loanable funds in order to borrow and make planned expenditures increase.

• A)higher; reduce
• B)higher; increase
• C)lower; reduce
• D)lower; increase

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Definitions:

Aggression

Behavior aimed at causing harm or pain to others, which can be physical, verbal, or non-verbal.

Regression

Regression is a defense mechanism identified in psychoanalytic theory, where an individual retreats to earlier stages of development or simpler forms of behavior in the face of stress or as a means of coping.

Denial

A psychological defense mechanism wherein a person refuses to accept reality or facts, thus protecting themselves from uncomfortable feelings.

Repression

A defense mechanism where unwanted feelings and thoughts are unconsciously pushed out of conscious awareness.