Rational expectations imply a. markets always clear. b. that ...

[APUS57]

Rational expectations imply
 
  a. markets always clear.
  b. that prices are sticky
  c. policy that is unpredictable is irrelevant to economic outcomes.
  d. both a and c.
  e. None of the above.

Question 2

Based on the graph above, if the economy is at point 2, then (assuming no price shocks and no changes in actual and potential output) the inflation rate next period will be ________ percent.
 
  A) 5
  B) 3.5
  C) 4.5
  D) 4
  E) none of the above

[polinasid]

Answer to Question 1

E

Answer to Question 2

A

[APUS57]

Thanks for the timely response, appreciate it

Excellent