The Main Policy Conclusion of the Rational Expectations School Is

question 22

Multiple Choice

The main policy conclusion of the rational expectations school is

• A)fiscal policy lags are so long and variable that such policy is worthless,but monetary policy can be helpful
• B)monetary policy lags are so long and variable that such policy is worthless,but fiscal policy can be helpful
• C)both monetary and fiscal policy can be helpful if policy makers correctly anticipate the plans of firms and households
• D)both monetary and fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers
• E)neither monetary nor fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers