How Did Adaptive Expectations Theory Revolutionize the Way Economists Think

Multiple Choice

How did adaptive expectations theory revolutionize the way economists think about monetary policy?

A) It taught that monetary policy should follow the Phillips curve model.
B) It implied that monetary policy may not have real effects in the short run.
C) It revealed that monetary policy may not have real effects in the long run.
D) It implied that monetary policy must be expected to provide a stimulus.
E) It taught that monetary policy should develop consistent expectations.