According to the Rational Expectations Theory,monetary Policy Is Fully Anticipated

question 53

Multiple Choice

According to the rational expectations theory,monetary policy is fully anticipated and therefore only affects:

• A)the level of real GDP.
• B)t​he level of real investment.
• C)the price level.
• D)the level of real consumption.
• E)the level of exports.

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Definitions:

GICs

Guaranteed Investment Certificates are financial products in Canada offering an assured interest rate over an agreed-upon term.

Simple Interest

The interest calculated only on the principal amount, without the accumulation of prior interest.

Simple Interest

Interest figured only on the principal balance, or on the portion of the principal balance that is still due.

Closing Balance

The amount of money in an account at the end of a period, after all transactions have been accounted for.