Proponents of rational expectations theory argue that when government policies change, people adjust their expectations accordingly, and that failure to include that fact once led to estimates of the sacrifice ratio that were unreliable guides to policy.
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Q2: If the sacrifice ratio is five, it
Q3: Phillips said that a central bank cannot
Q4: Contractionary monetary policy contracts aggregate demand, reduces
Q5: If decreases in money supply or cuts
Q6: The Phillips curve implies that the economy
Q7: NAIRU (non-accelerating inflation rate of unemployment) refers
Q8: According to the textbook, the sacrifice ratio
Q9: When the money supply changes, the aggregate-demand
Q10: The Phillips curve simply shows the combinations
Q11: Rational expectations theory is based on the
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