The Primary Reason That Short-Lived Shocks Can Have Long-Run Effects

question 51

Multiple Choice

The primary reason that short-lived shocks can have long-run effects is

• A)the nonneutrality of money.
• B)misperceptions by the public over the actual price level and the expected price level.
• C)the presence of rational expectations among the public.
• D)the presence of propagation mechanisms.

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