If the Coefficient a in the New Classical Expression for Short-Run

question 49

Multiple Choice

If the coefficient a in the new classical expression for short-run aggregate supply were equal to zero,

• A)aggregate output would always be at its full-employment level.
• B)the short-run aggregate supply curve would slope down.
• C)the short-run aggregate supply curve would be a horizontal line.
• D)aggregate output would only differ from its full-employment level if the actual price level did not equal the expected price level.

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