MCQOPTIONS
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MCQOPTIONS
| 1. |
Which of the following statements is(are) correct? |
| A. | Even the earliest political business cycle and partisan models assume that expectations were rational |
| B. | The partisan model of fiscal policy cannot be modified to be consistent with rational expectations |
| C. | The myopic, or short-sighted behaviour of voters is inconsistent with rational expectations |
| D. | The earliest political business cycle models assumed that expectations were always rational, whereas the partisan model assumed that expectations were sometimes irrational. |
| Answer» D. The earliest political business cycle models assumed that expectations were always rational, whereas the partisan model assumed that expectations were sometimes irrational. | |