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Under the Adaptive Expectations Hypothesis, Which of the Following Is

Question 26

Multiple Choice

Under the adaptive expectations hypothesis, which of the following is the most likely short-run effect of a move to a more expansionary monetary policy?


A) higher prices and no change in real output
B) higher prices and expansion in real output
C) no change in prices but an expansion in real output
D) no change in either prices or real output

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