In the New Classical Model, an Anticipated Policy of a Continually

question 30

Multiple Choice

In the new classical model, an anticipated policy of a continually increasing money supply causes ________.

• A) the aggregate demand curve to shift right along a stationary aggregate supply curve, leading to continually increasing aggregate output and prices
• B) the aggregate supply curve to shift left along a stationary aggregate demand curve, leading to continually contracting aggregate output and prices
• C) the aggregate demand curve to shift continually to the right while simultaneously the aggregate supply curve shifts continually inward, leading to higher and higher price levels
• D) the aggregate demand curve to shift continually to the left while simultaneously the aggregate supply curve shifts continually outward, leading to higher and higher price levels

---

Definitions:

Profit-Maximizing Price

The price level at which a firm can generate the maximum possible profit, considering the relationship between price, demand, and cost.

High School Yearbook

A publication compiled annually by students or staff, capturing memories, photographs, and articles related to the events and people of a specific school year.

Collusively

Involves cooperation among competing firms to control market prices or exclude new competitors, contrary to free market principles.

Economic Profits

The surplus remaining after subtracting total costs from total revenues, including both explicit and implicit costs.