Which of the following events led to the crisis in macroeconomics and to the development of rational expectations theory?

Question

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Stagflation in the 1970s led to a crisis in macroeconomics because it contradicted the prevailing Keynesian view that inflation and unemployment had a stable inverse relationship. This crisis spurred the development of rational expectations theory, which posits that people's expectations about future economic conditions are based on all available information, including government policies, and can significantly impact economic outcomes.

Which of the Following Events Led to the Crisis in Macroeconomics