The idea that anticipated monetary policy changes cannot affect real GDP or employment is known as
A)real business cycle theory.
B)the policy irrelevance theorem.
C)monetarism.
D)Keynesianism.

Question

Quizplus · Accepted Answer

The idea that anticipated monetary policy changes cannot affect real GDP or employment is known as the policy irrelevance theorem. This theory suggests that individuals and businesses can anticipate policy changes and adjust their behavior accordingly, mitigating the effects of the policy on the real economy. Real business cycle theory and monetarism do not necessarily claim that anticipated monetary policy changes cannot affect real GDP or employment, while Keynesianism emphasizes the potential for monetary policy to affect real economic outcomes.

The Idea That Anticipated Monetary Policy Changes Cannot Affect Real