A Macroeconomic Policy Action Will Have a Longer-Term Effect on Aggregate

question 262

Multiple Choice

A macroeconomic policy action will have a longer-term effect on aggregate demand if people

• A) have rational expectations.
• B) have habit formation in consumption.
• C) have rational inattention.
• D) update the way they make decisions frequently.

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Definitions:

Current Assets

Assets likely to be converted into cash, sold, or consumed within a year or the normal operating cycle of the business.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a business.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue.

Dollar of Sales

The total monetary value of sales transactions completed over a specific period.