According to the Theory of Rational Expectations, Expansionary Fiscal Policy

question 93

Multiple Choice

According to the theory of rational expectations, expansionary fiscal policy that is anticipated will:

• A)cause wage expectations to adjust downward immediately following the lower price level.
• B)increase the real wage rate in the long run.
• C)cause a permanent decline in the natural rate of unemployment.
• D)decrease the real wage rate in the long run.
• E)cause wage expectations to adjust upward immediately following the higher price level.

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Definitions:

Status And Power

The relative standing or position of individuals or groups in a social hierarchy, and the ability to influence others or control resources.

Dark Triad

A set of three personality traits: narcissism, Machiavellianism, and psychopathy, which are considered socially malevolent and interpersonally destructive.

Narcissism

A personality trait characterized by a long-term pattern of exaggerated self-importance, need for admiration, and a lack of empathy for others.

Machiavellianism

A personality trait characterized by manipulativeness, callousness, cynicism, and a focus on self-interest and deception.