The Classical View That the Economy Reaches Its Long-Run Equilibrium

question 61

Multiple Choice

The classical view that the economy reaches its long-run equilibrium quickly implies that

• A) the aggregate demand shocks have only short-lived effects on output.
• B) the aggregate supply shocks have only short-lived effects on output.
• C) the aggregate demand shocks have only long-lived effects on output.
• D) the aggregate demand shocks are the source of business cycles.

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