According to rational expectations theory, predictable expansionary monetary and fiscal policies to reduce the unemployment rate are:
a. desirable because the result is to lower inflation.
b. harmful because the only result is higher inflation.
c. ineffective on the price level.
d. None of these.
b
Economics
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A decline in real mortgage rates will lead, other things the same, to ________
A) lower demand for housing B) tighter financing constraints C) an increase in residential investment D) a lower relative price of housing
Economics
Refer to Figure 4.1. The income effect of the price change in food on the quantity of food purchased is:
A) the change from F3 to F1. B) the change from F3 to F2. C) the change from F2 to F1. D) the change from F1 to F2. E) none of the above
Economics