The wage rate considered acceptable to workers engaged in collective bargaining will be determined ...

The wage rate considered acceptable to workers engaged in collective bargaining will be determined in part by what monetary policy workers expect in the near future.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

If rational expectations cause people's price expectations to be generally correct, active policy will influence the price level but not output.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

As long as wage increases do not exceed labor productivity growth rates, a stable price level should be the result.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

If the price level increases by more than expected, output can be expected to decrease as a result.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

One of the reasons fiscal and monetary policy can stimulate output and employment in the short run is that nominal wages increase faster than the price level.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 6

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 7

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

QUESTION 8

Adaptive expectations is a school of thought that argues people form expectations based on all available information, including the likely future actions of government policy makers.
 a. True
  b. False
  Indicate whether the statement is true or false