New Classical Economists Say That an Unanticipated Decrease in Aggregate

Multiple Choice

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

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