Which statement is true when rational expectations exist and there is a change in monetary policy which is unexpected?
A) The change in monetary policy leads to a change in aggregate demand that leads to a temporary short-run equilibrium that is different from the long-run equilibrium.
B) The change in monetary policy leads to a simultaneous shift of the short-run aggregate supply curve.
C) The change in monetary policy lead to a simultaneous shift in the long-run aggregate supply curve.
D) The change in monetary policy does not change equilibrium in either the short-run or long-run.
Correct Answer:
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Q144: One key assumption lying behind the policy
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A) monetary
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