-In the New Classical Model in the Figure Above, the Long-Run

question 17

Multiple Choice

-In the new classical model in the figure above, the long-run effects of an anticipated increase in aggregate demand that is less than expected ________.

• A) increases output from Y_n to Y₂, and the inflation rate from P₁ to P₂
• B) decreases output from Y_n to Y₅, and increases the inflation rate from P₁ to P₅
• C) does not change output and increases the inflation rate from P₁ to P₃
• D) does not affect the levels of real output or inflation

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Raising Taxes

The act of increasing the amount of money the government collects from individuals or businesses.

NDP

An abbreviation for the New Democratic Party, a social democratic political party in Canada.

Political Affiliation

An individual's alignment or support for a particular political party or ideology.

Electrical Connectors

Devices that join electrical circuits together, allowing electricity to flow from one element to another.