If a Rise in the Expected Price Level Results in an Immediate

question 65

Multiple Choice

If a rise in the expected price level results in an immediate and equal rise in wages and prices, then an expansionary monetary policy will cause ________.

• A) the aggregate demand curve to shift to the right, and output to increase only if the policy is anticipated
• B) the aggregate demand curve to shift to the right, and output to increase only if the policy is unanticipated
• C) a decline in the price level
• D) B and C only

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