In general,the faster inflationary expectations adjust,
A)the less macro policy can influence unemployment
B)the better discretionary policy can be expected to work
C)the slower the adjustment of the short-run Phillips curve
D)the stronger the case for active policy
E)none of the above

Question

Quizplus · Accepted Answer

When inflationary expectations adjust quickly, it reduces the ability of macroeconomic policy to influence unemployment, as people anticipate changes and adjust their behavior accordingly, diminishing the policy's effectiveness.

In General,the Faster Inflationary Expectations Adjust