Each of the Following Conditions Will Tend to Reduce the Sacrifice

Multiple Choice

Each of the following conditions will tend to reduce the sacrifice ratio except when:

A) workers and firms set wages and prices based on rational expectations.
B) policymakers make credible commitments to policy changes.
C) announcements of policy changes are made before workers and firms have formed expectations.
D) the concept of hysteresis accurately describes the impact of history on the natural rate of unemployment.