Rational Expectation Theory Implies That Accurately Anticipated Change in Aggregate

question 12

Multiple Choice

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

• A)​will increase real GDP in the short run.
• B)​will affect real GDP and inflation only in the long run.
• C)​may affect nominal GDP but not real GDP in the short run.
• D)​will do none of the above.

---

Definitions:

Lithium

A metallic element that occurs in nature as a mineral salt and is an effective treatment for bipolar disorders.

Dietary Restrictions

Limitations on what an individual can eat, often for health, religious, or ethical reasons.

Brain Stimulation

A therapeutic procedure that uses electrical impulses to stimulate or modulate brain activity for treating various neurological and psychiatric conditions.

Depressive Symptoms

Refers to the signs and manifestations of depression, including persistent sadness, loss of interest in activities, changes in appetite or sleep, and difficulty concentrating.