In the new classical view,
A) a change in the money supply will affect real GDP only if people anticipate the policy change.
B) monetary policy can never change real GDP.
C) using monetary policy will change real GDP only if the policy takes people by surprise.
D) fiscal policy has more chance of success than monetary policy.

Question

Quizplus · Accepted Answer

In the new classical view, monetary policy affects real GDP only if it is unanticipated, as people adjust their expectations and behaviors based on anticipated policy changes, neutralizing their impact on real GDP.

In the New Classical View