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According to New Classical Economics, Individuals Will Respond to Expansionary

Question 11

Multiple Choice

According to new classical economics, individuals will respond to expansionary monetary Jpolicy by


A) incorrectly forecasting what will happen to the price level and employment.
B) predicting no change in the rate of inflation because they adjust quickly.
C) predicting a lower rate of inflation and revising their expectations about future prices accordingly.
D) predicting a higher rate of inflation and revising their expectations about future prices.

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