Proponents of the Policy Irrelevance Proposition Believe That, Under the Assumption

Multiple Choice

Proponents of the policy irrelevance proposition believe that, under the assumption of rational expectations, the unemployment rate will

A) go up whenever the Fed announces an anticipated monetary policy change.
B) go down whenever the Fed announces an anticipated fiscal policy change.
C) equal the natural rate of unemployment in the long run, regardless of any monetary policy actions.
D) always be higher in the long run than the natural rate of employment.