Studying Alternative Theories of How People Form Expectations Is Particularly

Multiple Choice

Studying alternative theories of how people form expectations is particularly relevant to monetary policy because

A) if people fully expect inflation to occur,the effects of monetary policy are more widespread.
B) monetary policy can only have real effects on the economy if people fully expect inflation.
C) unexpected inflation cause prices to be flexible.
D) the effects of expected inflation are completely different from the effects of unexpected inflation.
E) expected inflation causes prices to become sticky.