A policy to do nothing and allow the economy to self-correct or adjust without interference from the federal government is also called a(n) _______________ policy:

With rational expectations, a correctly anticipated policy that would increase AD would lead to: a. higher inflation and lower unemployment in the short run

b. higher inflation and higher unemployment in the short run. c. higher inflation and no change in unemployment in the short run. d. lower inflation and lower unemployment in the short run.

In the Full Employment and Balanced Growth Act of 1978, Congress set a target rate of unemployment. The nation achieves this target rate

a. in most years b. at least once a year c. only rarely d. in election years e. at least once every five years