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If Expectations Are Rational, How Can Government Influence Unemployment in a Predictable

Question 90

Multiple Choice

If expectations are rational, how can government influence unemployment in a predictable way?


A) with the normal tools, used in the normal fashion
B) with fiscal policy; monetary policy will not work
C) with monetary policy; fiscal policy will not work
D) with surprise changes in policy only
E) with carefully planned and announced changes in policy only

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