In Case of the Classical Model, Increase in Aggregate Expenditure

Multiple Choice

In case of the classical model, increase in aggregate expenditure would:

A) shift the aggregate demand curve upward leading to an increase in real GDP and prices.
B) shift the aggregate demand curve downward leading to an increase in real GDP and prices.
C) shift the aggregate demand curve upward leading to a decrease in real GDP and prices.
D) shift the aggregate demand curve downward leading to a decrease in real GDP and prices.
E) shift the aggregate demand curve upward leading to an increase in prices and no change in real GDP.