The proposition that policy actions have no real effects in the short run if the policy actions are anticipated is known as

Question

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The policy irrelevance proposition states that if policy actions are anticipated, they will have no real effects in the short run. This is because individuals and firms will adjust their behavior to counteract the anticipated policy actions, resulting in no net change in economic outcomes. This proposition challenges the effectiveness of stabilization policies, such as monetary and fiscal policies, in stabilizing the economy in the short run.

The Proposition That Policy Actions Have No Real Effects in the Short