The Idea That Policy Actions Have No Real Effects in the Short

question 237

Multiple Choice

The idea that policy actions have no real effects in the short run if they are anticipated and no real effects in the long run is called the

• A) Keynesian proposition.
• B) policy irrelevance proposition.
• C) adaptive proposition.
• D) money illusion proposition.

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Definitions:

Asset Account

An account that represents a resource owned or controlled by a business, expected to provide future economic benefits.

Debit

An entry recorded on the left side of an account in double-entry bookkeeping that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Liability Account

An accounting record of obligations or debts that a company owes to others, typically outside of the company.

Increase

An upward adjustment or growth in value, quantity, or size.