According to the New Keynesian Approach Output Fell During the Early

Multiple Choice

According to the new Keynesian approach output fell during the early 1990s because

A) fiscal policy was sufficiently contractionary to offset an expansionary monetary policy.
B) the rightward shift of the AD curve was greater than the leftward shift of SRAS curve.
C) consumers and businesses came to expect higher inflation, thereby causing the SRAS curve to shift to the left.
D) the Fed decided to initiate a contractionary monetary policy to fight inflation.