In the New Keynesian View a Decline in Consumer Confidence

Multiple Choice

In the new Keynesian view a decline in consumer confidence that leads to a shift left in the AD curve

A) will cause output to fall in the short run, but not in the long run.
B) will cause output to fall in both the short run and the long run.
C) will not cause output to fall in either the short run or the long run.
D) will cause output to fall only if prices are fully flexible.