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What Is the Main Policy Conclusion of the Rational Expectations

Question 50

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What is the main policy conclusion of the rational expectations school?  


A)  Fiscal policy lags are so long and variable that such policy is worthless, but monetary policy can be helpful. 
B)  Monetary policy lags are so long and variable that such policy is worthless, but fiscal policy can be helpful. 
C)  Both monetary and fiscal policy can be helpful if firms and households correctly anticipate the plans of policymakers. 
D)  Neither monetary nor fiscal policy is helpful if firms and households correctly anticipate the plans of policymakers.

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