According to the rational expectationists,
A. even if there were a recession or substantial inflation, the best government policy would be to do nothing.
B. the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply, lowering the natural level of real GDP.
C. at best, government anti-recessionary policies would have no effect whatsoever.
D. All of the choices agree with the thought of rational expectationists.
D. All of the choices agree with the thought of rational expectationists.
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The amount of money that people wish to hold to use in transactions varies directly with
A) the income tax rate. B) their planned near-term purchases. C) the money supply. D) the interest rate.
A price floor is considered
A) "fair" based only on the fair results view. B) "fair" based only on the fair rules view. C) "unfair" based on both the fair results and fair rules views. D) "unfair" based only on the fair results view. E) "fair" based on the fair results view and on the fair rules view.