According to the New Classical Approach to the Aggregate Supply

question 25

Multiple Choice

According to the new classical approach to the aggregate supply curve,the aggregate supply curve slopes upward because

• A) increases in the price level result in lower real money balances.
• B) higher current output results in higher desired investment.
• C) higher prices result in higher levels of spending as consumers attempt to stay ahead of inflation.
• D) businesses have difficulty in distinguishing relative price increases from general price increases.

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