According to the rational expectations view, the government can change real output by:
A)making appropriate and well-publicized fiscal and monetary policy changes in the long run.
B)making appropriate and well-publicized fiscal and monetary policy changes in the short run.
C)making unexpected changes in aggregate demand.
D)keeping the economy away from inflation.
E)making unexpected changes in aggregate supply.

Question

Quizplus · Accepted Answer

Rational expectations suggest that only unexpected changes can affect real output, as people adjust their behavior based on anticipated policy changes.

According to the Rational Expectations View, the Government Can Change