If the public has rational expectations,
A) the only effective policy would be one that is implemented by surprise.
B) if the public incorrectly anticipates a given policy, there could be adverse results.
C) if policymakers do not do what they say they are going to do, then there could be adverse results.
D) a, b, and c
E) none of the above
D
You might also like to view...
In the above figure, the economy is at point A and the money wage rate rises by 10 percent. If the price level is constant, firms will be willing to supply output equal to
A) less than $16.0 trillion. B) $16.0 trillion. C) more than $16.0 trillion. D) Without more information, it is impossible to determine which of the above answers is correct.
Which of the following would shift the FE line to the left?
A) A beneficial supply shock B) A decrease in labor supply C) An increase in consumer spending D) An increase in the money supply