It Has Been Argued That the Experience of Paul Volcker's

Multiple Choice

It has been argued that the experience of Paul Volcker's fight against inflation during the late 1970s and early 1980s indicates that firms and workers

A) had adaptive expectations by changing their expectations of future inflation only after the current inflation rate had fallen.
B) had rational expectations and that they trusted Fed announcements.
C) preferred high unemployment to high inflation.
D) Both A and B are correct answers.