According to the Rational Expectations Model,the Attempt by the Government

question 91

Multiple Choice

According to the rational expectations model,the attempt by the government to reduce unemployment below its natural rate through expansionary policies will

• A)succeed in the short run and can succeed in the long run as long as the government makes it clear what its goals are.
• B)succeed because the government knows how people will react to their policies and will adjust their policies accordingly.
• C)fail because people will figure out what the government is doing and alter their expectations and their behaviour in ways that counteract the government policy.
• D)fail because the economy can never achieve an unemployment rate below the natural level.

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Definitions:

Financial Planning

The process of strategically managing one’s financial affairs to meet life goals and secure financial future.

Financial Planning

The process of creating strategies to manage financial affairs and meet life goals, involving aspects of budgeting, investing, and saving.

Sales Growth

Sales growth is the increase in sales over a specific period, indicating the health and expansion rate of a business, typically expressed as a percentage.

Fixed Assets

Long-term tangible assets used in a company's operations, such as machinery, buildings, and equipment, that are not expected to be converted into cash within a year.