A Conclusion of the Theory of Rational Expectations Is That

question 49

Multiple Choice

A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve to the right will:

• A)result in an increase in the demand for money once people's expectations have been accounted for.
• B)shift the AD curve in the opposite direction intended once people's expectations have been accounted for.
• C)result in no significant change in real or nominal GDP or employment once the change is anticipated.
• D)result in a change in real output in the intended direction if the policy is anticipated.
• E)result in a change in real output in the long run if the policy is unanticipated.

---

Definitions:

Functionalism

A conceptual viewpoint in the fields of sociology and anthropology that explains every component of society by its role in maintaining the society's overall stability.

Symbolic Interactionism

A sociological perspective that examines how individuals and societies use symbols to communicate and create social realities.

Feminism

A socio-political movement aiming to achieve equality between genders, focusing on women's rights and interests.

Post-Structuralist

An approach in various academic disciplines that explores ways in which power, culture, and language intersect.