Question

which of the following statements is true about the misperceptions theory? which of the following statements is true about the misperceptions theory? unanticipated changes in the nominal money supply have real effects, but anticipated changes are neutral. neither anticipated nor unanticipated changes in the nominal money supply has real effects on the economy. anticipated changes in the nominal money supply have real effects, but unanticipated changes are neutral. both anticipated and unanticipated changes in the nominal money supply have real effects on the economy

Answer 1

The misperceptions theory states that anticipated changes in the nominal money supply have real effects, but unanticipated changes are neutral.

Step-by-step explanation:

The correct statement about the misperceptions theory is that anticipated changes in the nominal money supply have real effects, but unanticipated changes are neutral.

Under the misperceptions theory, people adjust their behavior based on their expectations of future changes in the price level. Anticipated changes in the money supply lead to changes in wages and prices, which in turn affect the short-run aggregate supply curve and ultimately the level of real GDP. On the other hand, unanticipated changes do not have a significant effect on the economy.

Therefore, the statement that anticipated changes in the nominal money supply have real effects, but unanticipated changes are neutral is true about the misperceptions theory.