The Main Policy Conclusion of the Rational Expectations School Is

Multiple Choice

The main policy conclusion of the rational expectations school is that:

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 policy makers correctly anticipate the plans of firms and households.
D) both monetary and fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers.
E) neither monetary nor fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers.