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Suppose an Economist of the Rational Expectations School Is Giving

Question 117

Multiple Choice

Suppose an economist of the rational expectations school is giving advice to a policymaker.Which of the following is the piece of advice the economist would most likely give?  


A)  Do NOT use discretionary policy. 
B)  Do NOT use discretionary policy if activity lags are long. 
C)  Do NOT use fiscal policy if effectiveness lags are long. 
D)  Do NOT use monetary policy if implementation lags are long.

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