If Consumers Obey the Permanent-Income Hypothesis and Have Rational Expectations

question 9

Multiple Choice

If consumers obey the permanent-income hypothesis and have rational expectations, then ______ policy changes influence consumption.

• A) only unexpected
• B) only expected
• C) both expected and unexpected
• D) neither expected nor unexpected

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Definitions:

Sectional Disputes

Conflicts and disagreements between different regions or sections of a country, often based on economic, cultural, or political differences.

Whigs

A political faction and later a political party in the parliaments of England, Scotland, Great Britain and the United Kingdom, advocating for constitutional monarchism and parliamentary supremacy.

Economic Problems

Issues affecting the financial stability, growth, and sustainability of an economy, often characterized by inflation, unemployment, and recession.

Slave Power

A term used to describe the perceived political power held by slave owners in the United States pre-Civil War, influencing legislation and government.