In the Lucas Model, Monetary Policy Is Neutral Even in the Short

question 40

Multiple Choice

In the Lucas model, monetary policy is neutral even in the short run

• A)since nominal wages are completely rigid
• B)as long as monetary changes are fully anticipated
• C)since people never make forecast errors
• D)as long as real wages can adjust in proportion to money supply
• E)since the short-run AS-curve is assumed to be vertical

---

Definitions:

Myelination

The process of forming a myelin sheath around a nerve to improve the speed of electrical impulses.

Glial Cells

Non-neuronal cells in the nervous system that provide structural support, protection, and nutrition to neurons.

Myelination

The process of forming a myelin sheath around the axons of neurons, which insulates and increases the speed of electrical impulses as they travel between brain cells.

Neural Pruning

The process of eliminating neurons, synapses, or neural connections that are not used, which allows for more efficient synaptic communication and neural networks.