Proponents of rational expectations theory argued that, in the most extreme case, if policymakers are credibly committed to reducing inflation and rational people understand that commitment and quickly lower their inflation expectations, the sacrifice ratio could be as small as A. 5. B. 4. C. 1. D. 0.

Question

Eve Mcmahon

Mathematics

28 February, 18:26

Proponents of rational expectations theory argued that, in the most extreme case, if policymakers are credibly committed to reducing inflation and rational people understand that commitment and quickly lower their inflation expectations, the sacrifice ratio could be as small as A. 5. B. 4. C. 1. D. 0.

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Dane Powers · Answer 1

The answer is zero or option D.

Step-by-step explanation:

Proponents of rational expectations theory argued that, in the most extreme case, if policymakers are credibly committed to reducing inflation and rational people understand that commitment, and quickly lower their inflation expectations, the sacrifice ratio could be as small as 0.