According to rational expectations theory,
A) increasing the money supply to reduce unemployment will always be successful.
B) decreasing the money supply to reduce unemployment will usually be successful.
C) increasing the money supply to reduce unemployment will not be successful because of an offsetting decrease in prices.
D) increasing the money supply to reduce unemployment will not be successful because of an offsetting increase in prices.
D
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The use of money is more efficient than barter because the introduction of money
A) reduces the need for economic specialization. B) reduces the need to exchange goods. C) reduces the need for other stores of value. D) reduces transaction costs.
Describe an arms race in economic terms. Is it rational for countries to participate in an arms race?
What will be an ideal response?