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The Term Rational Expectations Is Most Accurately Associated with the Notion

Question 9

Multiple Choice

The term rational expectations is most accurately associated with the notion that


A) economic policy is ineffective and should not be used in a discretionary way.
B) it is always possible to reduce inflation without recession by simply letting aggregate demand fall as it will do automatically.
C) tax adjustments have no effect, but changes in the money supply can stimulate growth in an economy.
D) people always use as much information as possible in forming and acting on their expectations of the future.
E) all of the above.

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