A Key Difference Between the New Classical and the New

question 129

Multiple Choice

A key difference between the new classical and the new Keynesian views of the business cycle is the role played by

• A) unexpected changes in aggregate demand.
• B) government expenditure on goods and services.
• C) expected changes in aggregate demand.
• D) the growth rate of the quantity of money.

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Definitions:

Asset Account

An account on a company's balance sheet representing resources owned by or owed to the company that have economic value.

Expense Account

An account used to record expenses in accounting, representing money spent or costs incurred in an entity's operations to generate revenues.

Closing Journal Entries

Entries made at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts, preparing the books for the next period.

Dividends

Funds distributed to shareholders by a company, typically from its earnings.