Believers in the Hypothesis of Rational Expectations Argue That

Multiple Choice

Believers in the hypothesis of rational expectations argue that:

A) ​expansionary fiscal and monetary policy can reduce unemployment without creating inflation.
B) ​a trade-off exists between unemployment and inflation even in the long run.
C) ​the Phillips curve is vertical even in the short run for expected changes in inflation.
D) ​the Phillips curve is downward sloping even in the long run.