Which of the following are not assumptions of the policy ineffectiveness proposition?
A. Rational expectations.
B. Policy changes are not anticipated.
C. Economic agents have full information.
D. Nominal variables influence economic decisions.
E. Output and employment are at their natural level. Choose the most appropriate answer from the options given below:
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Business cycles and rational expectations has come up 21 times in 5 exams since 2010.
This question is on New classical economics and policy ineffectiveness, part of Business cycles and rational expectations in Macroeconomics.
Why anticipated policy may have no effect on output.
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Question from the UGC-NET 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.