Suppose That in a New Classical Model the Public Anticipates

question 143

Multiple Choice

Suppose that in a new classical model the public anticipates that policymakers will increase aggregate demand.However,aggregate demand increases by less than what the public anticipated.The result in the short run is that Real GDP ____________ and the price level ____________.

• A) decreases; decreases
• B) increases; increases
• C) increases; decreases
• D) decreases; increases

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Definitions:

Reciprocal Liking

Liking those who show that they like you.

Relationship

A connection, association, or involvement between two or more individuals.

Similarity Principle

The tendency for individuals to be attracted to or affiliate with others who are similar to themselves in various aspects.

Heterosexual Couples

Pairs consisting of one male and one female partner, typically in a romantic or sexual relationship.