If the Economy Is Initially at Equilibrium and an Unexpected

question 71

Multiple Choice

If the economy is initially at equilibrium and an unexpected decline in aggregate demand takes place, in the short run aggregate output will

• A)fall in the new classical view, but not in the new Keynesian view.
• B)fall in the new Keynesian view, but not in the new classical view.
• C)fall in both the new Keynesian and new classical views.
• D)remain at full employment in both the new classical and new Keynesian views.

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Definitions:

Labour Relations Code

Legislation that regulates the relationship between employers and unions, including the right to collective bargaining and strikes.

Lawful Strike

A work stoppage by a group of workers that is conducted according to legal guidelines and not prohibited by law.

Interest Dispute

A disagreement about the terms to be included in a new collective agreement.

Certification

The process of officially recognizing someone as having a particular status or being qualified to perform a certain activity.