According to the Lucas Critique, When Economists Evaluate Alternative Policies

question 43

Multiple Choice

According to the Lucas critique, when economists evaluate alternative policies they must take into consideration:

• A)how the policies will affect expectations and behaviour.
• B)whether the policy will offset the impact of automatic stabilizers.
• C)the stage of the political business cycle in which the policy is to be implemented.
• D)the length of the inside lags associated with the policies.

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Definitions:

Flunitrazepam

A potent sedative drug that is part of the benzodiazepine family, often associated with its use as a "date-rape" drug.

Benzodiazepine

A class of psychoactive drugs known for their tranquilizing effects, often used to treat anxiety, insomnia, and seizures, among other conditions.

"Date Rape" Drug

Substances that are sometimes used to facilitate sexual assault by incapacitating the victim, making them unable to consent or resist.

Endorphins

Natural, pain-relieving chemicals produced by the body that also contribute to feelings of pleasure and well-being.