To stabilize the economy rational expectations theorists favor the use of

Overshooting is when exchange rates:

a. adjust more in the short run than they need to for long-run equilibrium. b. adjust less in the short run than they need to for long-run equilibrium. c. are unable to adjust because of fixed exchange rates. d. adjust at the same rate as prices.

In the simplest Keynesian model of the determination of income, interest rates are assumed to be

A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant.