According to the Rational Expectations View, the Government Has the Ability

Multiple Choice

According to the rational expectations view, the government has the ability to control the level of real output and unemployment:

A) only in the short run if it makes unexpected changes in aggregate demand
B) only in the short run if it announces policies well in advance so that expectations are affected
C) only in the long run if it shifts aggregate supply instead of aggregate demand
D) only in the long run if it uses monetary policy instead of fiscal policy
E) only in the long run when the aggregate supply curve is vertical