The policy ineffectiveness proposition (PIP)argument states that under certain circumstances,neither expansionary demand-side fiscal policy nor expansionary monetary policy is effective at achieving macroeconomic goals.

Question

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The policy ineffectiveness proposition (PIP) argues that under certain conditions, neither expansionary demand-side fiscal policy nor expansionary monetary policy is effective at achieving macroeconomic goals. This proposition suggests that in situations where there is rational expectations, flexible prices, and no output gap, any attempt to use demand-side policies to stimulate the economy will be futile. Therefore, the answer is true.

The Policy Ineffectiveness Proposition (PIP)argument States That Under Certain Circumstances,neither