Which Theory Distinguishes Between Expected and Unexpected Fluctuations in Aggregate

question 95

Multiple Choice

Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and argues that only unexpected changes can affect real GDP?

• A) new classical cycle theory
• B) Keynesian cycle theory
• C) monetarist cycle theory
• D) real business cycle theory

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Definitions:

Present Value Factor

A factor used in the calculation of the present value of cash flows, based on a specific rate and number of periods.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

Present Value Index

The Present Value Index is a financial metric used to evaluate the viability of a project or investment by comparing its present value of future cash flows to the initial investment.

Investment Proposals

Documents or presentations by a company or individual seeking to attract investors by outlining potential investment opportunities and expected returns.