Which of the Following Is False

Multiple Choice

Which of the following is false?

A) ​If people can anticipate the plans of policy makers and alter their behavior quickly, their behavior could neutralize the intended impact of government action on real GDP.
B) ​The theory of rational expectations leads to optimistic conclusions regarding macroeconomic policy's ability to achieve its intended economic goals.
C) ​Rational expectation economists believe that wages and prices are flexible, and that workers and consumers incorporate the likely consequences of government policy changes quickly into their expectations.
D) ​Catching consumers and businessmen off-guard with macroeconomic policy changes gets harder the more you try to do it.