According to the rational expectations approach , if policy ...

[olgavictoria]

According to the rational expectations approach , if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output, then people will not be able to anticipate the effects of this policy on the price level, unemployment, and the real output level.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

According to the rational expectations theory, people's predictions about the future course of governmental economic policy influence the position of the short-run aggregate supply curve.
 a. True
  b. False
  Indicate whether the statement is true or false

[pallen55]

Answer to Question 1

False

Answer to Question 2

True