The idea that policy actions have no real effects in the short run if they are anticipated and no real effects in the long run is called the

A vocal minority of economists, believers in the theory of rational expectations, insist that

A. the Phillips curve is downward sloping even in the short run. B. the Phillips curve is vertical even in the short run. C. a trade-off exists between inflation and unemployment even in the long run. D. expansionary fiscal and monetary policy can reduce unemployment without creating inflation.

The general monitoring problem implies that:

A. government must intervene to protect national goals. B. competition will ensure common goals among the owners and managers of a firm. C. profit maximization should always be a firm's goal. D. there is a cost of supervising employees so that they work toward the owner's goals rather than their own.