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Suppose That in a New Classical Model the Public Anticipates

Question 143

Multiple Choice

Suppose that in a new classical model the public anticipates that policymakers will increase aggregate demand.However,aggregate demand increases by less than what the public anticipated.The result in the short run is that Real GDP ____________ and the price level ____________.


A) decreases; decreases
B) increases; increases
C) increases; decreases
D) decreases; increases

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