If Firms and Workers Have Rational Expectations,including Knowledge of the Policy

question 212

Multiple Choice

If firms and workers have rational expectations,including knowledge of the policy being used by the Federal Reserve

• A)expansionary monetary policy is especially effective.
• B)expansionary monetary policy is ineffective.
• C)expansionary monetary policy is effective in the short run,but not the long run.
• D)expansionary monetary policy is effective in the short run and the long run.

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Definitions:

Hippocampus

A major component of the brains of humans and other vertebrates, playing critical roles in the consolidation of information from short-term memory to long-term memory and in spatial memory that enables navigation.

Procedural Memories

A type of long-term memory that involves how to perform different actions and skills essentially, how we remember to do things.

Long-Term Memories

A type of memory capable of storing large amounts of information for potentially unlimited durations, from days to decades.

Declarative Memories

Memories that can be consciously recalled, such as facts and events, and articulated.