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

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