The Lucas Supply Function, in Combination with the Assumption That

Multiple Choice

The Lucas supply function, in combination with the assumption that expectations are rational, implies that an announced change in monetary policy affects

A) the actual price level, but not the expected price level.
B) neither the actual price level nor the expected price level.
C) the expected price level, but not the actual price level.
D) both the actual price level and the expected price level.