Multiple Choice
The rational expectations equilibrium approach emphasizes
A) the microeconomic foundations of macroeconomics
B) the idea that after disturbances output will not return to trend
C) the idea that even small menu costs involved in making price changes cause big problems
D) that fiscal and monetary policies are always successful in changing real output
E) that even rational decisions in an imperfectly competitive world often lead to socially undesirable outcomes
Correct Answer:
Verified
Correct Answer:
Verified
Q1: The propagation mechanism<br>A)explains why shocks to the
Q2: The random walk of GDP model assumes
Q3: Dynamic stochastic general equilibrium (DSGE) models<br>A)are based
Q4: The rational expectations approach<br>A) insists that all available
Q5: The real business cycle theory states that<br>A)changes
Q7: Critics of the so-called DSGE models point
Q8: The rational expectations approach assumes that<br>A)people never
Q9: If we compare the classical model with
Q10: The real business cycle theory asserts that
Q11: The rational expectations equilibrium approach to macroeconomics<br>A)stresses