-In the New Classical Model in the Figure Above, an Anticipated

Multiple Choice

-In the new classical model in the figure above, an anticipated monetary contraction ________.

A) increases output from Y_n to Y₂, and the inflation rate from P₁ to P₂
B) decreases output from Y_n to Y₄, and the inflation rate from P₃ to P₄
C) does not change output and increases the inflation rate from P₁ to P₃
D) does not change output and decreases the inflation rate from P₃ to P₁