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Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the Economy Starts at Point A.Fed

Question 131

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Exhibit 16-2
Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD<sub>2</sub>.A rise in Real GDP is likely if the economy operates under __________ assumptions,such as wage and price __________. A) new classical; flexibility B) new classical; inflexibilities C) new Keynesian; flexibility D) new Keynesian; inflexibilities
-Refer to Exhibit 16-2.Suppose the economy starts at point A.Fed monetary policy shifts the AD curve to AD2.A rise in Real GDP is likely if the economy operates under __________ assumptions,such as wage and price __________.


A) new classical; flexibility
B) new classical; inflexibilities
C) new Keynesian; flexibility
D) new Keynesian; inflexibilities

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