29. If expectations are rational, is it possible to reduce inflation without causing increased unemployment?

a. Yes, simply by using monetary policy to reduce aggregate demand instead of fiscal policy.

b. No, no economic theory assumes that this is possible under any conditions.

c. Yes, simply by making a quick move to reduce aggregate demand with no announcement.

d. No, rational expectations theory assumes that any decrease in inflation always triggers mass unemployment.

e. Yes, simply by reducing the growth aggregate demand to a lower level and announcing this in a credible way.