Author Question: According to the policy irrelevance proposition, monetary policy can affect real variables A) in ... (Read 110 times)

TFauchery · **on:** Jun 30, 2018

According to the policy irrelevance proposition, monetary policy can affect real variables

A) in the short run only, and then only if the policy was fully anticipated.
B) in both the short run and the long run.
C) in the short run only, and then only if the policy was unanticipated.
D) in the long run only.

Question 2

A researcher finds that for an economy, the nominal GDP in the year 2012 equals the nominal GDP in the year 2013. He also finds that the output of the economy has been the same over the two years. A situation like this is possible only if:

A) the annual inflation rate in the economy is negative.
B) the annual interest rate in the economy is negative.
C) the annual interest rate in the economy is zero percent.
D) the annual inflation rate in the economy is zero percent.