The rational expectations hypothesis implies that discretionary ...

[rmenurse]

The rational expectations hypothesis implies that discretionary macro-policy will:
 a. be ineffective, even in the short run.
  b. be effective in the short run but ineffective in the long run.
  c. be effective both in the short run and long run.
  d. make it possible to trade-off a higher rate of inflation for a lower rate of unemployment.

Question 2

Suppose you received a 5 percent increase in your nominal wage. Over the year, inflation ran about 2 percent. Which of the following is true?
 a. Your real wage increased.
  b. Your nominal wage decreased.
  c. Both your nominal and real wages decreased.
  d. Although your nominal wage rose, your real wage decreased.

[ergserg]

Answer to Question 1

a

Answer to Question 2

a

[rmenurse]

Correct answers!

[ergserg]

Great! Please up vote