When expectations are rational, a. a foreseen expansionary ...

[EAugust]

When expectations are rational,
 
  a. a foreseen expansionary policy action does not alter output.
  b. there cannot be any inflation.
  c. a foreseen expansionary policy action changes output.
  d. there is zero unemployment.

Question 2

Total planned expenditure is composed as
 
  a. planned investment.
  b. planned government spending and taxes.
  c. total investment, total consumption, and government spending.
  d. planned investment, planned government spending, and planned taxes.

[mcabuhat]

Answer to Question 1

A

Answer to Question 2

D