According to the rational expectations school,which of the following can affect the levels of output and employment?
A)an expansionary monetary policy,if it is fully anticipated
B)a contractionary monetary policy,if it is fully anticipated
C)monetary policy that is unanticipated
D)fiscal policy that is anticipated
E)the Fed's announcement of no change in monetary policy

Question

Quizplus · Accepted Answer

Rational expectations suggest that only unanticipated monetary policy can affect output and employment, as anticipated policies are already factored into economic agents' expectations.

According to the Rational Expectations School,which of the Following Can