Believers in the Hypothesis of Rational Expectations Argue That

question 71

Multiple Choice

Believers in the hypothesis of rational expectations argue that:

• A)expansionary fiscal and monetary policy can reduce unemployment without creating inflation.
• B)a trade-off exists between unemployment and inflation even in the long run.
• C)the only long-run impact of a change in monetary policy is a higher price level.
• D)the long run aggregate supply curve is upward sloping.
• E)when a change is correctly anticipated, expansionary fiscal policy changes real output.

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