Multiple Choice
Long-run aggregate supply shocks are not a source of business cycle fluctuations in the ________,because ________.
A) traditional Keynesian model;long-run supply shocks are incompatible with adaptive expectations
B) traditional Keynesian model;demand fluctuations are considered of dominant importance
C) real business cycle model;shocks cannot persist in the long run,when prices and wages are flexible
D) new Keynesian model;such shocks are anticipated by forward-looking consumers and firms
Correct Answer:
Verified
Correct Answer:
Verified
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