"With autonomous changes in the policy interest rate, the Federal Reserve cannot determine the long run equilibrium level of the real interest rate or potential output and will only be able to determine inflation"

This statement is consistent with ________. A) the notion that shifts in the MP curve may lead to shifts in the AD and AS curves but the LRAS remains unchanged
B) the notion of long-run independence between nominal and real variables
C) the notion of monetary neutrality
D) all of the above
E) none of the above

D

Economics

You might also like to view...

The income-expenditure model is best used for short-run analysis of economic fluctuations

Indicate whether the statement is true or false

Economics

Explain how menu costs affect the slope of the short-run aggregate supply curve

What will be an ideal response?

Economics