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:

Grazing Food Chain

Food chain in which energy is transferred from producers to grazers (herbivores).

Detrital Food Chain

Food chain in which energy is transferred directly from producers to detritivores.

Atmosphere

The layer of gases surrounding a planet or moon, held in place by gravity, essential for life on Earth.

Phosphorus

A chemical element that plays a vital role in biological processes such as energy transfer, genetic information processing, and bone formation.