The Rational Expectations Theory Implies That an Accurately Anticipated Change

question 56

Multiple Choice

The rational expectations theory implies that an accurately anticipated change in aggregate demand:

• A)will increase real GDP in the long run.
• B)will affect real GDP and inflation only in the long run.
• C)will affect real GDP in the short run but not nominal GDP.
• D)will affect nominal GDP in the short run but not real GDP.
• E)will affect real GDP in the long run but not nominal GDP.

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Definitions:

Obsessive-Compulsive Disorder

A mental disorder where individuals experience recurring, unwanted thoughts (obsessions) and repetitive behaviors (compulsions) as a way to manage anxiety.

Specific Phobia

An intense, irrational fear of a specific object, situation, or activity that is actively avoided or endured with extreme anxiety.

Specifiers

Are additional descriptors used in psychiatric diagnosis to provide a more comprehensive picture of the disorder.

Biological Preparedness

The concept that organisms are inherently inclined to form associations between certain stimuli and responses, facilitating the learning process.