Assume everyone in an economy uses rational expectations. Now suppose that the Federal Reserve wants to reduce the inflation rate. Given the goals of the Fed, do you think the Fed should announce its policy to reduce the inflation rate? Explain.

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The Answer of Assume everyone in an economy uses rational expectations. Now suppose that the Federal Reserve wants to reduce the inflation rate. Given the goals of the Fed, do you think the Fed should announce its policy to reduce the inflation rate? Explain.

Assume Everyone in an Economy Uses Rational Expectations