According to the rational expectations theory, monetary policy is ...

[future617RT]

According to the rational expectations theory, monetary policy is fully anticipated and therefore only affects:
 a. the level of real GDP.
 b. the level of real investment.
 c. the price level.
 d. the level of real consumption.
  e. the level of exports.

Question 2

Opponents of inflation targets believe that:
 a. such targets will encourage workers to shirk work.
 b. such targets will lead to unsustainable economic growth.
 c. such targets will lead the Fed to pay less attention to jobs and economic growth.
 d. such targets will cause international competitiveness to be lost and the value of savings to be reduced.
  e. such targets would prevent investors from investing in profitable ventures.

[bblaney]

Answer to Question 1

c

Answer to Question 2

c

[future617RT]

Excellent

[shailee]

TYSM