Multiple Choice
Both the new classical and new Keynesian business cycle theories agree that
A) expected changes in aggregate demand lead to the business cycle.
B) unexpected changes in aggregate demand cannot result in a business cycle.
C) the money wage rate is influenced by rational expectations of the price level.
D) the long-term nature of wage contracts allow expected changes in the price level to cause business cycles.
Correct Answer:
Verified
Correct Answer:
Verified
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