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Under the Rational Expectations Hypothesis, If Wages Adjust Rapidly to New

Question 276

Multiple Choice

Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, the only time that changes in government policies have real effects is when


A) the changes are unanticipated.
B) the changes involve fiscal policy.
C) the changes involve monetary policy.
D) the changes affect aggregate demand.

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