According to the New Classical Theory,if the Public Correctly Anticipates

question 126

Multiple Choice

According to the new classical theory,if the public correctly anticipates a government policy to increase aggregate demand,then

• A) there will be a short-run tradeoff between inflation and unemployment,but there will not be a long-run tradeoff.
• B) there will be a long-run tradeoff between inflation and unemployment,but there will not be a short-run tradeoff.
• C) there will be both a long-run and a short-run tradeoff between inflation and unemployment.
• D) there will be neither a long-run nor a short-run tradeoff between inflation and unemployment.
• E) there may be a short-run tradeoff between inflation and unemployment,but one cannot say for certain whether there will be a long-run tradeoff.

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Definitions:

Current Flow

The movement of electric charge carriers, like electrons, through a conductor, measured in amperes (A).

Current Flow

The directed movement of electric charge through a conductor, often described in terms of direction from positive to negative points.

Parallel

An electrical circuit configuration where components are connected across the same two points, providing multiple paths for the current.

Series

A circuit configuration where components are connected in a linear sequence so that the same current flows through each component.