According to the Lucas critique,changes in economic policy are likely to have important effects on
A) the available amounts of natural resources.
B) the behavior of consumers and firms.
C) the preferences of consumers.
D) none of the above.

Question

Quizplus · Accepted Answer

The Lucas critique states that changes in economic policy are likely to have important effects on the behavior of consumers and firms, as they adjust their expectations and decisions in response to policy changes. The other options, such as natural resources or consumer preferences, are less directly affected by economic policies.

According to the Lucas Critique,changes in Economic Policy Are Likely