One Key Implication of Rational Expectations Is That

question 137

Multiple Choice

One key implication of rational expectations is that

• A)anticipated monetary policy has no effect on the rate of unemployment or the level of real GDP.
• B)anticipated monetary policy can affect the rate of unemployment but not the level of real GDP.
• C)unanticipated monetary policy has no effect on the economy but anticipated monetary policy does have an effect on the economy.
• D)both unanticipated monetary policy and anticipated monetary policy have an effect on the economy.

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Definitions:

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