The Rational Expectations School Advocates the Passive Rule of a Fixed-Growth-Rate

The rational expectations school advocates the passive rule of a fixed-growth-rate monetary policy because

A) we don't have enough information to pursue an active policy
B) the economy is not in bad enough shape to require active intervention
C) then the Federal Reserve Board would be superfluous and we could eliminate a large bureaucracy
D) people render active policy ineffective by figuring out what it's going to be and taking actions to offset it
E) they prefer to put their major emphasis on an active fiscal policy

Correct Answer:

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