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If the Rational Expectation Theory Is Accurate, Equilibrium Real GDP

Question 129

Multiple Choice

If the rational expectation theory is accurate, equilibrium real GDP will change in the short run:


A) ​whenever the aggregate demand curve shifts.
B) ​only if discretionary fiscal policy is used.
C) ​only if there is a shift in aggregate demand that could not have been predicted from the information available to the public.
D) ​only if discretionary monetary policy is used.

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