According to the Classical Theory, an Inward Shift in Aggregate

question 245

Multiple Choice

According to the classical theory, an inward shift in aggregate demand would reduce

• A) real Gross Domestic Product (GDP) and the price level.
• B) the price level but have no effect on real Gross Domestic Product (GDP).
• C) real income but have no impact on the price Gross Domestic Product (GDP).
• D) the price level but increase real Gross Domestic Product (GDP).

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Definitions:

Level Of Significance

A threshold in hypothesis testing, below which the null hypothesis is rejected, indicating a statistically significant result.

Average Hourly Wage

The average earnings of employees per hour worked.

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