Which of the Following Statements Is Correct Concerning the Views

question 68

Multiple Choice

Which of the following statements is correct concerning the views of new Keynesians and new classicals concerning the short-run effects of an unexpected increase in aggregate demand?

• A)New classical economists believe that unexpected increases in aggregate demand affect only prices.
• B)New Keynesian economists believe that unexpected increases in aggregate demand affect only output.
• C)Both new Keynesian and new classical economists believe that unexpected increases in aggregate demand affect only output.
• D)Both new Keynesian and new classical economists believe that unexpected increases in aggregate demand affect both output and prices.