The Integration of Expectations into Macroeconomic Analysis Indicates That

Multiple Choice

The integration of expectations into macroeconomic analysis indicates that

A) fiscal policy is more potent than monetary policy.
B) monetary policy is more potent than fiscal policy.
C) once people come to expect a given rate of inflation, the inflation will neither stimulate real output nor reduce unemployment.
D) higher rates of inflation will lead to lower rates of unemployment in the long run but not in the short run.