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If a Rise in the Expected Price Level Results in an Immediate

Question 3

Multiple Choice

If a rise in the expected price level results in an immediate and equal rise in wages and prices,then an expansionary monetary policy will cause ________.


A) the aggregate demand curve to shift to the right, and output to increase only if the policy is anticipated
B) the aggregate demand curve to shift to the right, and output to increase only if the policy is unanticipated
C) a decline in the price level
D) both B and C of the above

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