According to the Lucas supply function, ________ affect(s) both actual and expected price levels in the same way.
A) any announced policy change
B) any unanticipated policy change
C) only announced fiscal policy changes
D) only announced monetary policy changes

Question

Quizplus · Accepted Answer

The Lucas supply function suggests that only anticipated or announced policy changes affect both actual and expected price levels in the same way, as agents adjust their expectations accordingly.

According to the Lucas Supply Function, ________ Affect(s) Both Actual