Which of the following models emphasizes the importance of credible, predictable government policies for maintaining full employment with low inflation?
A) the monetarist model
B) the Keynesian model
C) the supply-side model
D) the rational expectations model

Question

Quizplus · Accepted Answer

The rational expectations model emphasizes the importance of credible, predictable government policies for maintaining full employment with low inflation. It suggests that if people expect policymakers to act in a certain way, those expectations will influence their economic decisions, thereby affecting the economy's performance.

Which of the Following Models Emphasizes the Importance of Credible