The policy irrelevance proposition implies that
A. unanticipated monetary policy actions are equally effective in stimulating both aggregate demand and aggregate supply.
B. anticipated monetary policy actions are ineffective in generating changes in real Gross Domestic Product (GDP).
C. anticipated monetary policy actions are effective in stimulating aggregate supply, but they are not effective in stimulating aggregate demand.
D. anticipated monetary policy actions are effective in increasing real Gross Domestic Product (GDP), but they do not reduce unemployment.
Answer: B
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If a resource is in fact becoming scarcer, then one should expect
a. the price of the resource to rise. b. less demand for the resource as people try to conserve. c. greater supply as people reduce inventories before it is all gone. d. all of the above.
Look at the following data: The frictional unemployment rate is 2 percent, the structural unemployment rate is 3.5 percent, and the actual unemployment rate is 9.5 percent. The natural unemployment rate is ____________ percent and the cyclical unemployment rate is __________ percent
A) 1.5; 4 B) 5.5; 4 C) 1.5; 6 D) 6; 15