Rational Expectations Theory Suggests That

question 49

Multiple Choice

Rational expectations theory suggests that:

• A)monetary policy that is expected will have the greatest impact on changing output levels.
• B)policies that are expected will have no effect on output or unemployment.
• C)economic agents take into account past actions only to make their current decisions.
• D)discretionary policies are best at bringing about changes in output.

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Definitions:

Organization

A group of people with a particular purpose, such as a business or government department, organized for collective action.

Imprint

A lasting mark or impression, often used in the context of publishing to denote the brand or logo of the publishing house, or in manufacturing to indicate a distinct design.

Order Instrument

A financial document that is payable to a specific person or entity, or their assigns.

Negotiates

The process of discussing something formally to reach an agreement or compromise.