Under the Assumption of Rational Expectations, Fiscal and Monetary Policy

Multiple Choice

Under the assumption of rational expectations, fiscal and monetary policy changes are effective in the short run

A) all of the time.
B) only when the short-run aggregate supply curve is the same as the long-run aggregate supply curve.
C) only when the policy changes leave the position of the aggregate demand curve unaffected.
D) only when the policy changes are unanticipated.