Author Question: If the rational expectation theory is accurate, equilibrium real GDP will change in the short run: ... (Read 28 times)

xclash · **on:** Jun 30, 2018

If the rational expectation theory is accurate, equilibrium real GDP will change in the short run:
a. whenever the aggregate demand curve shifts.
b. only if discretionary fiscal policy is used.
c. only if there is a shift in aggregate demand that could not have been predicted from the information available to the public.
d. only if discretionary monetary policy is used.

Question 2

Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?
a. Investors may be able to enforce market efficiency.
b. The WTO will disenfranchise the country that allows this to happen.
c. Investors will immediately organize a speculative attack and the price of stocks will inflate.
d. The balance-of-payments deficit will increase, leading the economy into a debt trap.
e. Investors may not be able to adequately judge when the risk of investing in a firm rises.