The belief that the government can do absolutely nothing in either the short run or the long run to reduce the unemployment rate, because people will anticipate the government's actions, is held by the:
a. rational expectations school.
b. neo-Keynesian school.
c. classical school.
d. supply-side school.
e. Keynesian school.
Question 2
If the rate of inflation in a given time period turns out to be higher than lenders and borrowers anticipated, then the effect will be:
a. no change in the distribution of wealth between lenders and borrowers.
b. a net gain in purchasing power for lenders relative to borrowers.
c. a redistribution of wealth from borrowers to lenders.
d. a redistribution of wealth from lenders to borrowers.
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