QUESTION 20 for. A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve to the right will: O a result in no significant change in real or nominal GDP or employment once the change is anticipated. O b. shift the AD curve in the opposite direction intended once people's expectations have been accounted O c. result in an increase in the demand for money once people's expectations have been accounted for Od result in a change in real output in the long run if the policy is unanticipated. O e result in a change in real output in the intended direction if the policy is anticipated.
QUESTION 20 for. A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve to the right will: O a result in no significant change in real or nominal GDP or employment once the change is anticipated. O b. shift the AD curve in the opposite direction intended once people's expectations have been accounted O c. result in an increase in the demand for money once people's expectations have been accounted for Od result in a change in real output in the long run if the policy is unanticipated. O e result in a change in real output in the intended direction if the policy is anticipated.
Chapter24: Fiscal Policy
Section: Chapter Questions
Problem 15P
Related questions
Question
![QUESTION 20
A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve to the right will
O a result in no significant change in real or nominal GDP or employment once the change is anticipated.
O b. shift the AD curve in the opposite direction intended once people's expectations have been accounted for.
O c. result in an increase in the demand for money once people's expectations have been accounted for.
Od result in a change in real output in the long run if the policy is unanticipated.
O e result in a change in real output in the intended direction if the policy is anticipated.
QUESTION 21
A firm facing a horizontal demand curve:
Oa is likely to price its goods below market price.
Ob. can affect the price it receives for its output.
O c. faces a perfectly inelastic demand curve for its product.
O d. cannot increase its output even if it wants to.
O e can increase its output as much as it wants at a given price.
A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d21a614-14c6-45c6-bcc4-1e7a1e39a9cc%2F4cd4d596-16a9-46f7-93e0-13d5417fbd9b%2Fjwcc3bd_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTION 20
A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve to the right will
O a result in no significant change in real or nominal GDP or employment once the change is anticipated.
O b. shift the AD curve in the opposite direction intended once people's expectations have been accounted for.
O c. result in an increase in the demand for money once people's expectations have been accounted for.
Od result in a change in real output in the long run if the policy is unanticipated.
O e result in a change in real output in the intended direction if the policy is anticipated.
QUESTION 21
A firm facing a horizontal demand curve:
Oa is likely to price its goods below market price.
Ob. can affect the price it receives for its output.
O c. faces a perfectly inelastic demand curve for its product.
O d. cannot increase its output even if it wants to.
O e can increase its output as much as it wants at a given price.
A
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![MACROECONOMICS FOR TODAY](https://www.bartleby.com/isbn_cover_images/9781337613057/9781337613057_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![MACROECONOMICS FOR TODAY](https://www.bartleby.com/isbn_cover_images/9781337613057/9781337613057_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning