According to the New Classical Model, Changes in Aggregate Demand

question 166

Multiple Choice

According to the new classical model, changes in aggregate demand change real GDP

• A) all of the time.
• B) only when the short-run aggregate supply curve is vertical.
• C) only when the changes in aggregate demand are expected.
• D) only when the changes in aggregate demand are unexpected.

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Definitions:

Psychologically Oriented

Focused or directed towards understanding the mental processes and behavior from a psychological perspective.

Instinct Approaches

Theoretical perspectives that emphasize the innate, automatic, genetic, and biological factors driving behavior.

Physiological Motivations

Basic bodily needs driving behavior, such as hunger, thirst, sleep, and avoidance of pain, essential for survival and well-being.

Ectotherm

An organism that relies on external environmental heat sources to regulate its body temperature, commonly referred to as "cold-blooded".