According to the Rational Expectations School,if the Fed Announces a Policy

question 101

Multiple Choice

According to the rational expectations school,if the Fed announces a policy of rapid growth in the money supply,but then puts the brakes on money expansion without any announcement,the short-run result is likely to be

• A)an unexpected surge in aggregate demand
• B)an unexpected drop in aggregate demand
• C)an anticipated surge in aggregate demand
• D)an anticipated drop in aggregate demand
• E)no change in aggregate demand

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Behavioral

Pertaining to actions or reactions of persons or organisms in response to external or internal stimuli.

Physiological

Related to the functions and processes of living organisms and their parts.

Sensitivity

The ability of a measure to detect differences between groups.

Functional MRI

A neuroimaging procedure that measures and maps the brain's activity by detecting changes associated with blood flow, used particularly in studying brain functions.