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According to the Rational Expectations Theory, People Base Their Expectations

Question 87

Multiple Choice

According to the rational expectations theory, people base their expectations about inflation on _____


A) the announcement of a change in policy.
B) weighted averages of previous inflation rates, with the most distant getting the heaviest weight.
C) all information available to them.
D) changes in monetary policy only.
E) changes in both monetary and fiscal policy.

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