What Did Proponents of Rational Expectations Argue About the Sacrifice

question 190

Multiple Choice

What did proponents of rational expectations argue about the sacrifice ratio and why?

• A) The sacrifice ratio would be high because it was rational for people not to immediately change their expectations.
• B) The sacrifice ratio would be high because people might adjust their expectations quickly if they found anti-inflation policy credible.
• C) The sacrifice ratio could be low because it was rational for people not to immediately change their expectations.
• D) The sacrifice ratio could be low because people might adjust their expectations quickly if they found anti-inflation policy credible.

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Definitions:

DNA Molecule

The carrier of genetic information in living organisms and viruses, composed of two long strands forming a double helix.

mRNA Molecule

A molecule of RNA that encodes a chemical blueprint for a protein product.

Nucleotide Sequence

The order of nucleotides in a DNA or RNA molecule, determining the genetic information carried by that molecule.

Information Flow

The transfer or movement of information within a system or among various systems.