Which Statement About New Classical Macroeconomics Is FALSE

question 58

Multiple Choice

Which statement about new classical macroeconomics is FALSE?

• A) It returned to the classical view that shifts in the aggregate demand curve affect only the aggregate price level, not aggregate output.
• B) It challenged traditional arguments about the slope of the short-run aggregate supply curve based on the concept of rational expectations.
• C) It suggested that changes in productivity cause economic fluctuations.
• D) It embraced the Keynesian notion that changes in aggregate demand may affect aggregate output in the short run.

---

Definitions:

U.S. Dollar-Denominated Returns

Investment returns calculated in U.S. dollars, highlighting the effect of currency fluctuation on international investments for U.S. investors.

Lowest Volatility

The condition of experiencing the smallest degree of variation in price over a specified period, often sought after in stable investment options.

U.S. Dollar-Denominated Returns

The gains or losses on an investment reported in U.S. dollars, regardless of the currency of the initial investment.

Currency Selection Return

Currency Selection Return refers to the gains or losses resulting from the active management decision of choosing to invest in currencies expected to appreciate relative to others.