Under adaptive expectations the short-term effect of an, Microeconomics

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Under adaptive expectations the short-term effect of an

Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a:

1- Permanent reduction in the unemployment rate.

2- Temporary reduction in the unemployment rate.

3- Permanent reduction in the inflation rate.

4- Temporary reduction in the inflation rate.

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