If the interest rate is 7 percent on euro-denominated assets and 5 percent on dollar-denominated assets, and if the dollar is expected to appreciate at a 4 percent rate, the expected return on ________-denominated assets in terms of ________ percent

_____ represents the relation between total expenditures, or total spending, and the price level

a. Gross National Product b. Inflation c. Real Gross Domestic Product d. Aggregate supply e. Aggregate demand

Critics of rational expectation theory believe: a. most people are truly not very informed about the effects of a policy change

b. most people do not adjust their behavior very rapidly to changes in government policies, in part because they are not informed about the effects of policy changes. c. that wages and prices are not as flexible as the rational expectation theory assumes. d. all of the above.