Multiple Choice
Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to expansionary monetary policy?
A) A higher general level of prices but no change in real output
B) A higher general level of prices and an expansion in real output
C) No change in the general level of prices and a reduction in real output
D) No change in either the general level of prices or real output
Correct Answer:
Verified
Correct Answer:
Verified
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