Author Question: In the Friedman-Lucas money surprise model A) If actual inflation is higher than anticipated ... (Read 120 times)

Mr.Thesaxman · **on:** Jun 30, 2018

In the Friedman-Lucas money surprise model

A) If actual inflation is higher than anticipated inflation, then output must be above its trend value.
B) If actual inflation is higher than anticipated inflation, then output must be below its trend value.
C) money is neutral.
D) monetary policy does not work.

Question 2

In an economy with higher and more variable inflation, the new classical model would predict that the short run aggregate supply curve would

a. be horizontal.
b. be more horizontal.
c. be steeper.
d. shift more rapidly.