According to new classical economists,if a decrease in aggregate demand is correctly anticipated,the short-run aggregate supply curve will shift __________ at the same time the AD curve shifts _________ so that there will be no change in Real GDP.

Question

Quizplus · Accepted Answer

According to new classical economists, if a decrease in aggregate demand is correctly anticipated, the short-run aggregate supply curve will shift rightward at the same time as the AD curve shifts leftward, resulting in no change in Real GDP. This is because the supply curve will adjust to the lower demand, keeping output constant. Therefore, option D is the correct answer.

According to New Classical Economists,if a Decrease in Aggregate Demand