New Classical Economists Say That an Unanticipated Increase in Aggregate

Multiple Choice

New classical economists say that an unanticipated increase in aggregate demand first

A) increases the price level and real output, and then reduces short-run aggregate supply such that the economy returns to the full-employment level of output.
B) increases the price level and real output, and then increases long-run aggregate supply.
C) increases long-run aggregate supply, and then increases the price level and real output.
D) reduces short-run aggregate supply, and then reduces long-run aggregate supply.