Rational Expectation Theory Implies That Accurately Anticipated Change in Aggregate

question 85

Multiple Choice

Rational expectation theory implies that accurately anticipated change in aggregate demand:

• A)​will increase RGDP in the long run.
• B)​will affect RGDP and inflation only in the long run.
• C)​may affect RGDP but not nominal GDP.
• D)​will tend to be offset by the actions of input suppliers as they react to their inflation expectations.

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Definitions:

Random Sampling

A method of selecting a sample from a population in which each member has an equal chance of being chosen.

Accurate

Characterized by correctness or precision, often referring to information, measurements, or results that closely match the true or expected values.

Daily Activities

Consist of everyday tasks, routines, and duties that individuals engage in, ranging from professional responsibilities to personal care.

Naturalistic Observation

A research method in which subjects are observed in their natural environment without any manipulation or intervention by the observer.