Problem
1. Why may the 'supply-induced' business cycle theory be an inadequate explanation of most business cycles?
2. What do you understand by the term 'rational expectations'? Using appropriate diagrams, explain the differences between the two rational expectations theories of the business cycle discussed in this chapter,
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.