If the IS Curve Is Relatively Steep,then

question 55

Multiple Choice

If the IS curve is relatively steep,then

• A)there can be no long-run tradeoff between inflation and unemployment.
• B)monetary policy cannot be very effective in changing GDP.
• C)rational expectations theory is probably correct.
• D)Ricardian equivalence most likely holds.
• E) budget deficits will not affect future capital accumulation.

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