Under New Keynesian Theory,a Correctly Anticipated Decrease in Aggregate Demand

question 125

Multiple Choice

Under new Keynesian theory,a correctly anticipated decrease in aggregate demand will lead to __________ in Real GDP and __________ in the price level.

• A) a decrease; a decrease
• B) no change; an increase
• C) no change; no change
• D) an increase; an increase
• E) an increase; no change

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Definitions:

Seed Leaf

Seed leaf, or cotyledon, is the first leaf or one of the first pair of leaves that develop from the embryo of a seed.

Megaspores

Female spores that develop into female gametophytes in plants.

Ovule

The structure in seed plants that develops into a seed after fertilization, containing the female gametophyte.

Cycads

Ancient group of seed plants characterized by a stout and woody trunk with a crown of large, hard and stiff, evergreen leaves.