20. According to the new classical theory, if the public correctly anticipates a government policy to increase aggregate
demand, then
there will be a short-run tradeoff between inflation and unemployment, but there will not be a long-run
tradeoff.
there will be a long-run tradeoff between inflation and unemployment, but there will not be a short-run
tradeoff.
there will be both a long-run and a short-run tradeoff between inflation and unemployment.
there will be neither a long-run nor a short-run tradeoff between inflation and unemployment.
there may be a short-run tradeoff between inflation and unemployment, but one cannot say for certain whether
there will be a long-run tradeoff.
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: Understanding and applying – DISC:
Understanding and applying economic models
21. According to new classical theory, if the public correctly anticipates a government policy to increase aggregate
demand, then the
short-run Phillips curve will be upward sloping, but the long-run Phillips curve will be downward-sloping.
long-run Phillips curve will be upward sloping, but the short-run Phillips curve will be downward-sloping.
short-run Phillips curve will be upward sloping, but the long-run Phillips curve will be vertical.
long run Phillips curve will be upward sloping, but the short-run Phillips curve will be vertical.
short- and long-run Phillips curves will be vertical.
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: Understanding and applying – DISC:
Understanding and applying economic models
22. According to rational expectations theory,
every day is a new day and yesterday’s occurrences have no bearing on today’s decisions.
when making decisions a person will consider only information based on past experience.
even though a person considers information related to future events as potentially important for decision
making, he realizes that such information is unreliable and worthless.
past experience is a good guide for decision making, but so is information related to possible future outcomes.
United States – BUSPROG: Analytic
United States – OH – Default City – DISC: Understanding and applying – DISC:
Understanding and applying economic models
Bloom’s: Application