The key difference between the new classical theory of the business cycle and the new Keynesian theory of the business cycle is that the new classical theory believes that__________ while the new Keynesian theory believes that __________.
A) only unexpected changes in aggregate demand will change real GDP; both expected and unexpected changes in aggregate demand will change real GDP
B) expected changes in aggregate demand will change real GDP; expected changes in aggregate demand will not change real GDP
C) only unexpected changes in aggregate demand will change real GDP; only expected changes in aggregate demand will change real GDP
D) the short-run aggregate supply curve is horizontal; the short-run aggregate supply curve is vertical.
Correct Answer:
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