Monetarists and the rational expectations theorists agree that

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Monetarists and rational expectations theorists both suggest that the Federal Reserve should follow a monetary rule. Monetarists believe that controlling the money supply is the key to stabilizing the economy, while rational expectations theorists argue that people have rational expectations about the effects of monetary policy and, thus, the Fed's policies should be transparent and predictable through adherence to a monetary rule. The other options are incorrect: B is not necessarily true as changes in interest rates can affect the demand and supply of bonds; C is false as the money supply can indeed be measured and controlled by the Fed; and D is not a shared view of these two schools of thought as monetarists generally believe that monetary policy is more effective than fiscal policy.

Monetarists and the Rational Expectations Theorists Agree That