Which of the Following Best Characterizes How Economists of the Rational

question 130

Multiple Choice

Which of the following best characterizes how economists of the rational expectations school view the economy?  

• A) They have no confidence in the ability of workers and firms to observe and react to economic events. 
• B) They have great faith in the ability of monetary policymakers to maintain a full employment economy with stable prices. 
• C) They believe that effective monetary policy can shift the potential level of output to the right. 
• D) They believe workers and firms make decisions based on what they think monetary policy will be in the future.

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