If a country wants to keep its exchange rate unchanged, then the Central Bank must sacrifice full oversight of monetary policy. Is the statement true or false. Explain your answer. (b) With the existing economic development, it is found that monetary policy is not always in accordance with the theory. Therefore Robert Lucas and Thomas Sargent then developed an analysis to evaluate monetary policy theory, and then Lucas and Sargent explained rational expectations. Explain what is meant by rational expectation and how it impacts the effectiveness of monetary policy. ..

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