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13 September, 12:13

According to the theory of rational expectations, individuals will respond to expansionary monetary policy by:

A. Predicting a lower rate of inflation

B. Predicitng a higher rate of inflation

C. predicting no change in the rate inflation

D. incorrectly forecasting what will happen to the price level and employment

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Answers (1)
  1. 13 September, 13:26
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    B. Predicting a higher rate of inflation
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