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Proponents of Rational Expectations Theory Have Argued That, in the Most

Question 4

Multiple Choice

Proponents of rational expectations theory have argued that, in the most extreme case, if policymakers are credibly committed to reducing inflation, and rational people understand that commitment and quickly lower their inflation expectation, the sacrifice ratio could be as small as what?


A) 0
B) 1
C) 4
D) 5

Correct Answer:

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