Under the Assumption of Rational Expectations, Real GDP Is Determined

question 76

Multiple Choice

Under the assumption of rational expectations, real GDP is determined by

• A) the economy's aggregate demand curve.
• B) monetary policy but not by fiscal policy.
• C) a combination of monetary and fiscal policy.
• D) the long-run aggregate supply curve.

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Definitions:

Rand

The official currency of South Africa, symbolized as ZAR.

Trade Balance

A measure of a country's exports minus its imports, indicating whether a country is in a surplus or deficit trade position.

Imports

Goods or services brought into one country from another for sale, which can affect a nation's economy in various ways.

Exports

Products or services shipped from one country to another for the purpose of sale or exchange.