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