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According to the New Classical School, If People Have Rational

Question 78

Multiple Choice

According to the New Classical School, if people have rational expectations, then


A) known policy changes can produce price surprises, and thus increases in real output.
B) known policy changes can produce no price surprises, and thus no increases in real output.
C) unknown policy changes can produce no price surprises, and thus no increases in real output.
D) they will be able to predict policy changes.

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