Contrast the rational expectations hypothesis and keynes

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3. Contrast the rational expectations hypothesis and Keynes' description of expectations. Begin by explaining Muth's hypothesis in detail, and then explain Keynes' view of how people determine their long term expectations of the future. Conclude with a thorough discussion of how you would prescribe macroeconomic policy in accordance with each of these two ways in which people are hypothesized to base their expectations of future events.

Reference no: EM13721035

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