The Policy Ineffectiveness Proposition

question 40

Multiple Choice

The policy ineffectiveness proposition

• A)asserts that anticipated changes in monetary policy cannot affect real aggregate output.
• B)rules out output effects from policy surprises.
• C)implies that an anticipated contractionary monetary policy cannot reduce the rate of inflation.
• D)implies that an anticipated expansionary monetary policy will not cause the price level to rise.

---

Definitions:

Equivalent

Being equal in value, measure, force, effect, significance, etc.

Truth Value

The attribute assigned to propositions to determine their veracity, quantified as either true or false, crucial in various branches of logic.

Conditional

A logical statement that connects two propositions, such that the second proposition follows from the first, typically formulated as "if... then..."

Equivalent Statements

Sentences that have the same truth value in every possible situation.