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Economists in the Rational Expectations School Believe a Certain Circumstance

Question 61

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Economists in the rational expectations school believe a certain circumstance needs to exist in order for expansionary monetary policy to be fully effective.What is that circumstance?  


A)  The policy must be anticipated by workers and firms. 
B)  Aggregate supply must shift to the left. 
C)  The economy must be operating at or above its potential output level. 
D)  The policy must be totally unexpected.

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