The rational expectations view that expectations regarding policy and its effects are important to consider:
A. Serves as the primary rationale for the Laffer Curve
B. Is now accepted by most mainstream economists
C. Is consistent with the monetary rule calling for a constant rate of growth in the money supply
D. Is challenged by research indicating that expectations have little economic effect
B. Is now accepted by most mainstream economists
You might also like to view...
If demand increases and supply decreases
A) the market clearing price definitely will increase, and the equilibrium quantity definitely will increase. B) the market clearing price definitely will increase, and the equilibrium quantity definitely will decrease. C) the market clearing price definitely will increase, but the change in the equilibrium quantity cannot be determined without more information. D) the equilibrium quantity definitely will decrease, but the change in the market clearing price cannot be determined without more information.
Other things constant, an increase in the real interest rate will
a. cause consumers to reduce their purchases of durable items like appliances and automobiles. b. induce businesses to increase their level of investment. c. make borrowing money more attractive. d. increase the natural rate of unemployment.