Available evidence suggests that
A)only expected changes in the money supply affect output.
B)only unexpected changes in the money supply affect output.
C)both expected and unexpected changes in the money supply affect output.
D)neither expected nor unexpected changes in the money supply affect output.

Question

Quizplus · Accepted Answer

Both expected and unexpected changes in the money supply can affect output, according to the widely accepted theory of the Phillips curve. Expected changes can lead to adjustments in prices and wages that can affect output, while unexpected changes can disrupt economic expectations and lead to changes in spending and production.

Available Evidence Suggests That