The Rational Expectations Theory Implies That an Accurately Anticipated Change

question 56

Multiple Choice

The rational expectations theory implies that an accurately anticipated change in aggregate demand:

• A)will increase real GDP in the long run.
• B)will affect real GDP and inflation only in the long run.
• C)will affect real GDP in the short run but not nominal GDP.
• D)will affect nominal GDP in the short run but not real GDP.
• E)will affect real GDP in the long run but not nominal GDP.

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