One Implication of Coupling the Rational Expectations Hypothesis with the Assumption

question 273

Multiple Choice

One implication of coupling the rational expectations hypothesis with the assumption of flexible wages and prices is that

• A) expansionary monetary policy will be effective in combating recessions.
• B) contractionary monetary policy will be effective in combating inflation.
• C) only predictable policy actions by the Fed will have an effect on the real economy.
• D) only unpredictable policy actions by the Fed will have an effect on the real economy.

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Definitions:

XYY Syndrome

A genetic condition where an individual, typically male, has an extra Y chromosome, which can lead to various physical and developmental characteristics.

Klinefelter Syndrome

A genetic condition that affects males, characterized by an extra X chromosome, leading to symptoms such as reduced fertility and physical developments typical of both sexes.

Fragile X Syndrome

A genetic condition causing intellectual disability, behavioral challenges, and physical anomalies, often due to a mutation on the X chromosome.

Down Syndrome

A genetic disorder caused by the presence of an extra chromosome 21, characterized by physical growth delays, characteristic facial features, and mild to moderate intellectual disability.