The New Classical Model Implies That a Shift to a More

question 106

Multiple Choice

The new classical model implies that a shift to a more expansionary fiscal policy will

• A)stimulate aggregate demand and employment.
• B)retard aggregate demand and employment.
• C)increase the real rate of interest.
• D)exert little or no impact on the real interest rate,aggregate demand,and employment.

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Definitions:

Absolute Value

A number's distance from zero on the number line, without considering its direction; denoted by two vertical bars on either side of the number.

Second Quartile

Also known as the median; it splits the data set into two halves, with 50% of the data below it and 50% above it.

Relative Standing

A measure or ranking of a value or observation within the context of a larger set of data or population.

Observation

An act of recording the occurrence or existence of a specific entity or phenomenon.