The rational expectations model asserts that the monetary policy multiplier
A)is larger than the fiscal policy multiplier but only in the long run
B)can be large in the short run but is zero in the long run
C) is zero in the short run and large in the long run
D)can be zero if the Fed has no credibility
E)is always zero for any unannounced policy changes

Question

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The Answer of The rational expectations model asserts that the monetary policy multiplier
A)is larger than the fiscal policy multiplier but only in the long run
B)can be large in the short run but is zero in the long run
C) is zero in the short run and large in the long run
D)can be zero if the Fed has no credibility
E)is always zero for any unannounced policy changes

The Rational Expectations Model Asserts That the Monetary Policy Multiplier