If the Public Has Rational Expectations, an Attempt to Increase

Multiple Choice

If the public has rational expectations, an attempt to increase aggregate demand to stimulate the economy will:

A) ​be less inflationary in the short run than if the public alters their expectations slowly in response to changes in government policy.
B) ​be more effective if the public alters their expectations quickly in response to changes in government policy.
C) ​be ineffective if the shift in aggregate demand is predictable.
D) ​all of the above.