According to the Rational Expectations Hypothesis, Monetary Policy Can Have

question 136

Multiple Choice

According to the rational expectations hypothesis, monetary policy can have effects on such variables as real Gross Domestic Product (GDP) in the short run

• A) only when the policy is anticipated.
• B) only when the policy is unsystematic and unanticipated.
• C) regardless of whether the policy is anticipated or unanticipated.
• D) when the central bank implements policy actions as anticipated.

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Definitions:

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