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According to the Lucas Supply Function, in Combination with the Assumption

Question 129

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According to the Lucas supply function, in combination with the assumption that expectations are rational, change in government policy can affect real output only if


A) the policy change is correctly anticipated by the public.
B) the policy change is a surprise.
C) the policy change is a mix of both fiscal and monetary policy changes.
D) expansionary policy changes are made.

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