How this policy affect feds ability to move real economy, Macroeconomics

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How this policy affect feds ability to move real economy

Problem

Suppose the Federal Reserve adopts a policy of complete transparency; that is, suppose it announces beforehand how it will change the money supply. According to rational expectations theory, how will this policy affect the Fed's ability to move the real economy (e.g., the unemployment rate)?

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Macroeconomics: How this policy affect feds ability to move real economy

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Macroeconomics: How this policy affect feds ability to move real economy

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