A large change in expectations can cause EMP to lead to a reduction in output if the shift in _____ is not sufficiently large.
A) IS
B) LM
C) AD
D) none of the above

Question

Quizplus · Accepted Answer

A large change in expectations can cause expansionary monetary policy (EMP) to lead to a reduction in output if the shift in aggregate demand (AD) is not sufficiently large to offset negative expectations.

A Large Change in Expectations Can Cause EMP to Lead