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:

Conscious Rehearsal

The intentional practice or repetition of information in one's mind to facilitate memorization.

Implicit Memory

Refers to memories that are recalled unconsciously and effortlessly, influencing thoughts and behaviors without our awareness.

Mourning War

Indigenous North American warfare practices where raids were conducted to avenge the death of a tribe member or to capture members from other tribes in order to replace the deceased, thus maintaining social stability within the tribe.