An Expansionary Monetary Policy Will Cause Aggregate Output to Expand

Multiple Choice

An expansionary monetary policy will cause aggregate output to expand in the non-activist macroeconomic model ________.

A) if the policy is unanticipated
B) if the policy is anticipated
C) only after a long and variable lag, provided the policy is anticipated
D) never; output will never expand in the non-activist model when monetary policy is changed