According to the Lucas supply function, ________ no effect on real output.
A) any announced policy change has
B) any unanticipated policy change has
C) only announced fiscal policy changes have
D) only announced monetary policy changes have

Question

Quizplus · Accepted Answer

The Lucas supply function suggests that only unanticipated policy changes can affect real output. Announced policy changes are anticipated and thus have no effect on real output.

According to the Lucas Supply Function, ________ No Effect on Real