According to the new classical theory,if the public correctly anticipates a government policy to increase aggregate demand,then
A) there will be a short-run tradeoff between inflation and unemployment,but there will not be a long-run tradeoff.
B) there will be a long-run tradeoff between inflation and unemployment,but there will not be a short-run tradeoff.
C) there will be both a long-run and a short-run tradeoff between inflation and unemployment.
D) there will be neither a long-run nor a short-run tradeoff between inflation and unemployment.
E) there may be a short-run tradeoff between inflation and unemployment,but one cannot say for certain whether there will be a long-run tradeoff.
Correct Answer:
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Q36: Q37: One of the key assumptions of the Q38: Stagflation is the simultaneous occurrence of Q39: Milton Friedman argued that there is a Q40: Q42: Milton Friedman argued that the economy is Q43: When everyone correctly anticipates that the Fed Q44: New classical economists believe that there is Q45: Q46: Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
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