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According to the Rational Expectations Theory

Question 55

Multiple Choice

According to the rational expectations theory


A) anticipation of inflation can cause deflation.
B) anticipation of inflation actually causes inflation.
C) inflation rates are unrelated to unemployment rates.
D) the economic understanding of workers and managers is incomplete,making it unlikely that their inflationary expectations will influence the economy.
E) anticipation of unemployment levels will help prepare workers for impending layoffs.

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