New Classical Economists Believe That If Policy Is Correctly Anticipated

question 30

Multiple Choice

New classical economists believe that if policy is correctly anticipated and if rational expectations hold,when the Fed increases the money supply the result will be a(n) ______________ in the price level and ____________________________.

• A) decrease; no change in Real GDP
• B) decrease; decrease in Real GDP
• C) increase; no change in Real GDP
• D) increase; increase in Real GDP

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Definitions:

Protists

A diverse group of eukaryotic microorganisms, which are not plants, animals, or fungi, ranging from amoebas to algae, and can be either single-celled or multicellular.

Simplest

Referring to the most basic or least complicated form, condition, or version.

Red Algae

Aquatic plants belonging to the phylum Rhodophyta, known for their reddish coloration due to phycoerythrin pigments.

Accessory Pigments

Pigments in photosynthetic organisms that absorb light energy and pass it to chlorophyll for photosynthesis, extending the range of light wavelengths that can be used.