A core belief of modern macroeconomics is that in the short run,

A) fiscal policy is more effective in changing output than monetary policy.
B) monetary policy is more effective in changing output than fiscal policy.
C) fluctuations in aggregate demand affect unemployment.
D) fluctuations in aggregate demand have no impact on the price level.
E) the economy always operates at or near the natural rate of unemployment.

ANSWER:

C) fluctuations in aggregate demand affect unemployment.