The Rational Expectations Hypothesis Argues That a Monetary Policy Designed

question 21

Multiple Choice

The rational expectations hypothesis argues that a monetary policy designed to stabilize the economy will succeed only when

• A)changes in the money supply are unexpected.
• B)the government's budget is not in deficit.
• C)labour unions have long-term contracts.
• D)changes in the money supply are completely anticipated.

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Definitions:

Disruptive Malaise

A state of general discomfort or uneasiness, whose exact cause is difficult to identify, that disrupts regular functioning or well-being.

Sleep Disturbances

Varied issues related to sleeping, including difficulty falling or staying asleep, excessive sleepiness, or abnormal behaviors during sleep.

Sedative

A class of drugs that have a calming or tranquilizing effect, often used to treat anxiety or help with sleep.

Head Injury

A physical trauma to the head, often leading to brain damage or dysfunction.