Multiple Choice
Rational expectations assumes that individuals
A) can accurately predict the future.
B) make predictions based on the past behavior of the economy.
C) form their predictions of macroeconomic variables randomly.
D) have perfect foresight.
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q60: The IS curve shifts to the right
Q61: A change in which of the following
Q62: Suppose there is an increase in expected
Q63: Explain the determinants of aggregate private spending.
Q64: Suppose there is a fiscal expansion in
Q65: "Animal spirits" refers to<br>A)the stubborn refusal of
Q66: Explain what effect an increase in future
Q67: Explain what effect a reduction in future
Q69: The IS curve becomes steeper when<br>A)government spending
Q70: Assume individuals consider only the short-run effects