According to economists of the rational expectations school, ...

[swpotter12]

According to economists of the rational expectations school, _____.
 a. the passive approach must be adopted because they believe the economy is too complex
  b. individual forecasts about policies can never be right
 c. anticipated monetary policy can affect the output level
 d. discretionary policy can stabilize the economy
 e. discretionary policy should be completely avoided

Question 2

Ms. Jones is a professor at a university. She strongly supports the rational expectations theory. She is likely to believe that the only time active policy has an impact on aggregate output is when:
 a. an expansionary policy is implemented.
  b. a recessionary policy is implemented.
  c. policy changes are unannounced.
 d. the economy has a recessionary gap.
 e. the economy has an expansionary gap.

[mirabriestensky]

Answer to Question 1

e

Answer to Question 2

c