According to the theory of rational expectations, individuals will respond to expansionary monetary policy by:
APredicting a lower rate of inflation
BPredicitng a higher rate of inflation
Cpredicting no change in the rate inflation
Dincorrectly forecasting what will happen to the price level and employment
APredicting a lower rate of inflation
BPredicitng a higher rate of inflation
Cpredicting no change in the rate inflation
Dincorrectly forecasting what will happen to the price level and employment
