Those who accept both the rational expectations hypothesis and the assumption of flexibility of wages and price would likely argue that
A. if policy makers are willing to accept a high inflation rate, they can reduce unemployment to a point below the natural rate.
B. policy makers can eliminate fluctuations in the level of business activity with careful planning of a widely publicized monetary policy.
C. saving and investment do not contribute to economic growth.
D. active policy making does not contribute to economic stability.
Answer: D
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With special-interest legislation,
a. benefits are concentrated but costs are widespread b. both benefits and costs are concentrated c. benefits are widespread but costs are concentrated d. both benefits and costs are widespread e. there is no predictable relationship between costs and benefits
Total income received by households is called: a. national income
b. gross domestic product. c. personal income. d. gross national product.