The theory of rational expectations concludes that

A. since expectations can cause discretionary stabilization policies to be pro-cyclical, it is better to rely upon policy rules.
B. discretionary monetary policy is a more powerful stabilization device than is discretionary fiscal policy.
C. discretionary fiscal policy is a more powerful stabilization device than is discretionary monetary policy.
D. discretionary policies are more effective than rules in stabilizing the economy.


A. since expectations can cause discretionary stabilization policies to be pro-cyclical, it is better to rely upon policy rules.

Economics

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Fill in the blank(s) with the appropriate word(s).

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