The Key Difference Between the New Classical Theory of the Business

question 190

Multiple Choice

The key difference between the new classical theory of the business cycle and the new Keynesian theory of the business cycle is that the new classical theory believes that__________ while the new Keynesian theory believes that __________.

• A) only unexpected changes in aggregate demand will change real GDP; both expected and unexpected changes in aggregate demand will change real GDP
• B) expected changes in aggregate demand will change real GDP; expected changes in aggregate demand will not change real GDP
• C) only unexpected changes in aggregate demand will change real GDP; only expected changes in aggregate demand will change real GDP
• D) the short-run aggregate supply curve is horizontal; the short-run aggregate supply curve is vertical.

---

Definitions:

Published

The process of making content available to the public, typically through printed or digital media, after it has undergone review, editing, and approval.

Evaluation

The systematic assessment of the value, importance, or quality of something, often for the purpose of making decisions or improvements.

Intelligence Test

A standardized test designed to measure human intelligence as distinct abilities or as a single general ability.

Current Name

The present or most recent name or designation of an entity, individual, or concept.