Expansionary monetary policy ________ interest rates, which ________ the ________.
lowers; decreases; demand for loanable funds
raises; increases; quantity demanded for loanable funds
raises; decreases; aggregate demand
raises; increases; aggregate demand
Rational expectations theory
explains the relationship between the unemployment rate and inflation.
explains why prices are flexible in the long run.
holds that people form expectations on the basis of all available information.
holds that people's expectations of future inflation are based on their most recent experiences.
holds that people form expectations perfectly.
lowers; increases; quantity demanded for loanable funds
i).lowers; increases; demand for loanable funds... View the full answer