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In the New Classical View, Firms and Workers

Question 24

Multiple Choice

In the new classical view, firms and workers


A) adjust their wages and prices, even in the short run.
B) do not adjust their wages and prices in the short run because they have imperfect information about changes in the price level.
C) increase their output when the price level is lower than expected.
D) fail to incorporate expectations of changes in the money supply into their forecasts of the aggregate price level.

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