Which of the Following Is TRUE Regarding the New Classical

Multiple Choice

Which of the following is TRUE regarding the new classical view of the business cycle?

A) Long- term contracts cause the money wage rate to be sticky.
B) If firms and workers anticipate an increase in aggregate demand, money wages can be adjusted.
C) If firms and workers expect the quantity of money to increase, aggregate demand will decrease.
D) Long- term contracts cause business cycles.