According to a New Keynesian Theorist,a Correctly Anticipated Increase in Aggregate

question 67

Multiple Choice

According to a new Keynesian theorist,a correctly anticipated increase in aggregate demand will

• A) cause the price level to increase by a greater amount in the short run than what a new classical rational expectations theorist would predict.
• B) cause the price level to increase by a smaller amount in the short run than what a new classical rational expectations theorist would predict.
• C) cause the price level to increase by the same amount in the short run that a new classical rational expectations theorist would predict.
• D) leave the price level unchanged in the short run,but Real GDP will increase more than what a new classical theorist would predict.
• E) leave the price level unchanged in the short run,but Real GDP will increase less than what a new classical theorist would predict.

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