A shortcoming of the rational expectations hypothesis is that
A) it ignores short-term wage stickiness.
B) people prefer rational ignorance in making decisions.
C) it ignores the role of saving.
D) it is inconsistent with the long-run Phillips curve.
Correct Answer:
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Q42: According to the original Phillips curve, there
Q43: The long-run Phillips curve
A) shows a tradeoff
Q44: For developed countries like the United States
Q45: One major conclusion of the rational expectations
Q46: Suppose policymakers want to keep the unemployment
Q48: When inflationary expectations are added to the
Q49: The 2007-2009 recession was not as severe
Q50: Adaptive expectations are driven by emotions.
Q51: The natural rate of unemployment is the
Q52: Rational expectations analysis leads to the conclusion
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