The Lucas Supply Model, in Combination with the Assumption That

question 84

Multiple Choice

The Lucas supply model, in combination with the assumption that expectations are rational, leads to the conclusion that

• A) expansionary policies, but not contractionary policies, can have an impact on real output.
• B) contractionary policies, but not expansionary policies, can have an impact on real output.
• C) only unanticipated policy changes can have an impact on output.
• D) neither anticipated nor unanticipated policy changes can have an impact on output.

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Definitions:

Forgetting Curve

The graphic pattern representing the relationship between measures of learning and the length of the retention interval: As the retention interval gets longer, memory decreases.

Unrelated Verbal Material

relates to words or phrases that have no direct connection or relevance to each other, often used in memory or cognitive processing studies.

Encoding Specificity

The principle that memories incorporate unique combinations of information when encoded, making recall more effective when context at the time of retrieval matches the context of encoding.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.