Which of the following is the basic tenet of new classical economics?
a. A change in the fiscal policy affects the equilibrium level of real GDP but has no impact on the equilibrium price level.
b. A government-induced shift in aggregate demand affects the real GDP only if they are expected by the economic agents.
c. A change in aggregate demand affects the aggregate price level only if the aggregate supply curve is perfectly elastic.
d. A change in monetary policy affects the equilibrium level of real GDP only if those changes are unexpected.
e. An expected change in a monetary or fiscal policy leads to a proportional shift of the long run supply curve.
d
You might also like to view...
The market structure in which there is interdependence among firms is
A) monopolistic competition. B) oligopoly. C) perfect competition. D) monopoly.
Which of the following examples shows the problem of using physical units as the measure of total economic activity?
a. Milk is measured by gallons; milk is paid for with dollars. b. Milk is measured by gallons; train travel is measured by miles. c. A gallon of milk weighs more than a gallon of water. d. A plane covers more mph than a train does.