If people do not always make the same mistakes when forecasting the future, then
A) rational expectations are irrational.
B) the Fed can control monetary policy and determine real variables such as real GDP.
C) the policy irrelevance theorem holds.
D) fiscal policy is more effective than monetary policy at fine-tuning the economy.
Correct Answer:
Verified
Q187: A hypothesis that assumes that people combine
Q188: The rational expectations hypothesis suggests that
A)unanticipated fiscal
Q189: Under the assumption of rational expectations, real
Q190: The rational expectations hypothesis states that
A)individuals always
Q194: Fully anticipated monetary policy actions cannot alter
Q195: The proposition that policy actions have no
Q196: Adding the assumption of pure competition and
Q200: Which of the following is NOT an
Q212: According to a theory that relies on
Q215: Those who accept both the rational expectations
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