A principle difference between the new Classical and the new Keynesian models has to do with the choices made by business firms. We find that
A) new classical business firms choose the output level given the price level, while new Keynesian firms choose the price level given the level of output.
B) new classical business firms choose the price level given the output level, while new Keynesian firms choose the output level given the level of output.
C) both new classical and new Keynesian firms select the price level, but only new classical firms select the output level.
D) both new classical and new Keynesian firms select the output level, but only Keynesian firms select the price level.
A
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What will be an ideal response?