Suppose Current Government Spending Decreases AND That Individuals Expect Future

question 64

Multiple Choice

Suppose current government spending decreases AND that individuals expect future government spending to decrease.Given this information,in which of the following cases will output in the current period be more likely to increase?

• A)individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates.
• B)individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates.
• C)individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates.
• D)the output effects will be the same in B and C

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Definitions:

Projected Patterns

Forecasted trends or behaviors expected to occur based on analysis of historical data and current conditions.

Movement Analysis

The study of movement in order to identify patterns or inefficiencies for the purpose of improving performance or reducing the risk of injury.

Probabilistic Model

A statistical model that incorporates random processes, indicating the likelihood of various possible outcomes.

Movement Model

A framework in human resource management that focuses on the flow of employees within an organization, including promotions, transfers, and exits.