Rational expectations theory suggests that the Fed and other policymakers must fool the public if their policies are to have short-term effects.

Name: Rational expectations theory suggests that the Fed and other policymakers must fool the public if their policies are to have short-term effects.
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Rational expectations theory suggests that the public will anticipate the effects of policy changes and adjust their behavior accordingly, making it difficult for policymakers to achieve short-term effects.

Rational Expectations Theory Suggests That the Fed and Other Policymakers