Which of the Following Is True of the Classical Model

question 43

Multiple Choice

Which of the following is true of the classical model?

• A)Changes in aggregate demand does not have any impact on the aggregate price level.
• B)The aggregate supply curve is perfectly elastic.
• C)An increase in aggregate demand increases the price level, output remaining unchanged.
• D)Changes in aggregate demand determines the equilibrium output of the economy.
• E)Real GDP and price level remain unchanged irrespective of changes in aggregate demand and supply.

---

Definitions:

Need Allocation

The process of determining and distributing resources or responsibilities among parties based on their needs or requirements.

Magnitude

The size, extent, or importance of something, often used in scientific contexts to measure quantities or effects.

Contribution

The act of giving or adding to something with the purpose of improvement or making a difference.

Commitment

A pledge or binding agreement to do something or remain loyal to a cause, person, or institution.