^{Let Aggregate Demand Be Summarized by Y = k}0

question 47

Multiple Choice

^{Let aggregate demand be summarized by Y = k}0 ^{+ k}1^{M - P) and aggregate}
Supply by P = P^{^}
^
+ cY - Y*) . All notation is standard but for , which here
Represents forecasted general prices. A change in the responsiveness of firms' prices to expectations is captured by a change in

• A) only c.
• B) ^{only k}1^.
• C) ^{only k}0^.
• D) ^{both k}0 ^{and k}1^.
• E) none of the above.

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