If the Economy Is Initially at Equilibrium and an Unexpected

question 71

Multiple Choice

If the economy is initially at equilibrium and an unexpected decline in aggregate demand takes place, in the short run aggregate output will

• A)fall in the new classical view, but not in the new Keynesian view.
• B)fall in the new Keynesian view, but not in the new classical view.
• C)fall in both the new Keynesian and new classical views.
• D)remain at full employment in both the new classical and new Keynesian views.

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