Under Adaptive Expectations,which of the Following Will Likely Be an Initial

question 146

Multiple Choice

Under adaptive expectations,which of the following will likely be an initial effect of an unanticipated shift to a more restrictive macroeconomic policy?

• A)a short-run decrease in output and a long-run decrease in inflation
• B)no change in output even in the short run,only a permanent decrease in inflation
• C)a short-run decrease in inflation and a long-run decrease in output
• D)lower inflation and lower output in the long run