Ms Jones Is a Professor at a University

Multiple Choice

Ms. Jones is a professor at a university. She strongly supports the rational expectations theory. She is likely to believe that the only time active policy has an impact on aggregate output is when _____

A) an expansionary policy is implemented.
B) a recessionary policy is implemented.
C) policy changes are unannounced.
D) an economy has a recessionary gap.
E) an economy has an expansionary gap.