According to Classical Macroeconomic Theory, an Increase in Aggregate Demand

question 42

Multiple Choice

According to classical macroeconomic theory, an increase in aggregate demand will _____ in the long run.

• A)only raise the inflation rate
• B)increase both output and the inflation rate
• C)only reduce the inflation rate
• D)decrease both output and the inflation

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Definitions:

Common Law

A legal framework that relies on court rulings and past case decisions instead of laws passed by legislation.

Quasi-Contracts

Quasi-contracts are legal obligations imposed by courts in order to prevent unjust enrichment, even though no actual contract exists.

Implied-In-Law

Refers to obligations and rights that arise from certain acts or situations as recognized by courts, despite no explicit agreement or contract.

Void Contract

A contract that is legally unenforceable from the start due to illegality or inability to fulfill the terms.