Suppose, under the imperfect-information model, that a stimulative monetary policy is enacted in an attempt to increase real GDP. Its effectiveness is larger
A) the more firms expect the stimulus to increase relative prices.
B) the more firms expect the stimulus to increase output.
C) the smaller the resulting variation in price expectations.
D) a and c only.
E) none of the above.

Question

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The Answer of Suppose, under the imperfect-information model, that a stimulative monetary policy is enacted in an attempt to increase real GDP. Its effectiveness is larger
A) the more firms expect the stimulus to increase relative prices.
B) the more firms expect the stimulus to increase output.
C) the smaller the resulting variation in price expectations.
D) a and c only.
E) none of the above.

Suppose, Under the Imperfect-Information Model, That a Stimulative Monetary Policy