According to the Lucas Supply Function, in Combination with the Assumption

question 129

Multiple Choice

According to the Lucas supply function, in combination with the assumption that expectations are rational, change in government policy can affect real output only if

• A) the policy change is correctly anticipated by the public.
• B) the policy change is a surprise.
• C) the policy change is a mix of both fiscal and monetary policy changes.
• D) expansionary policy changes are made.

---

Definitions:

Eliminate Surplus Words

The practice of removing unnecessary words in writing to make it clearer and more concise.

Economically

Pertaining to the efficient and prudent use of resources, or relating to economics as a field of study.

Redundant Words

Unnecessary words in a sentence or phrase that do not add any significant meaning or value to the message being conveyed.

Clear Writing

The practice of writing in a simple, understandable, and straightforward manner.