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In the Classical Model of the Price Level, Prices Are

Question 275

Multiple Choice

In the classical model of the price level, prices are _____, the short-run aggregate supply curve is vertical, and as a result, a decrease in the money supply leads to _____ in the aggregate price level.


A) sticky; a more than proportional decrease
B) flexible; a proportional decrease
C) sticky; a more than proportional increase
D) flexible; a proportional increase

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