Economists of the rational expectations school believe that expansionary monetary policy is fully effective only if:
a. the policy is anticipated by workers and firms
b. it causes the aggregate supply curve to shift to the left.
c. the economy is operating at or above its potential output level.
d. policy makers follow through on their previously announced plans.
e. the policy is totally unexpected.
e
Economics
You might also like to view...
Which of the following statements is true for both Microsoft and a locally owned restaurant?
A. Both confront perfectly elastic demand for their products. B. Both are perfect competitors. C. Both seek to maximize profits. D. Neither firm is able to influence the price of their products.
Economics
In a market for money, it is typically the case that we use the ________ in a supply and demand model.
A. interest rate B. inflation rate C. wage rate D. monetary index
Economics