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The Lucas Supply Model, in Combination with the Assumption That

Question 211

Multiple Choice

The Lucas supply model, in combination with the assumption that expectations are rational, leads to the conclusion that


A) expansionary policies, but not contractionary policies, can have an impact on real output.
B) contractionary policies, but not expansionary policies, can have an impact on real output.
C) only unanticipated policy changes can have an impact on output.
D) neither anticipated nor unanticipated policy changes can have an impact on output.

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