According to the new classical theory, if the public correctly anticipates a government policy to increase aggregate demand, then
A) there will be a short-run tradeoff between inflation and unemployment, but there will not be a long-run tradeoff.
B) there will be a long-run tradeoff between inflation and unemployment, but there will not be a short-run tradeoff.
C) there will be both a long-run and a short-run tradeoff between inflation and unemployment.
D) there will be neither a long-run nor a short-run tradeoff between inflation and unemployment.
E) there may be a short-run tradeoff between inflation and unemployment, but one cannot say for certain whether there will be a long-run tradeoff.
D
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