If People Have Rational Expectations and Correctly Estimate the Effects

question 126

Multiple Choice

If people have rational expectations and correctly estimate the effects of a change in government policy, when the economy is initially at full employment, any anticipated increase in aggregate demand will result in:

• A)​a decrease in both aggregate demand and short-run aggregate supply.
• B)​an increase in short-run aggregate supply that will maintain full employment.
• C)​higher prices that will reduce aggregate demand to its original level.
• D)​a decrease in short-run aggregate supply that will maintain full employment.

---

Definitions:

Oncology Unit

A specialized department within a hospital or medical facility that focuses on the treatment and care of patients with cancer.

Extended Family

A family group that extends beyond the nuclear family, including grandparents, aunts, uncles, and other relatives.

Family Functions

Family functions refer to the roles and responsibilities that family members have towards each other to maintain a healthy family dynamics.

Family Processes

The dynamic interactions and patterns of behavior within a family that affect its members' relationships and functioning.