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-In the New Classical Model in the Figure Above, the Initial

question 25

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  -In the new classical model in the figure above, the initial impact of an unanticipated monetary contraction ________. A)  increases output from Y<sub>n</sub> to Y<sub>2</sub>, and the inflation rate from P<sub>1</sub> to P<sub>2</sub> B)  decreases output from Y<sub>n</sub> to Y<sub>4</sub>, and the inflation rate from P<sub>3</sub> to P<sub>4</sub> C)  does not change output and increases the inflation rate from P<sub>1</sub> to P<sub>3</sub> D)  does not change output and decreases the inflation rate from P<sub>3</sub> to P<sub>1</sub>
-In the new classical model in the figure above, the initial impact of an unanticipated monetary contraction ________.


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