The _______ cycle theory states that only unexpected fluctuations in aggregate demand bring fluctuations in real GDP around potential GDP.
A)new Keynesian
B)monetarist
C)Keynesian
D)real business
E)new classical

Question

Quizplus · Accepted Answer

The new classical cycle theory posits that it is primarily unexpected changes in aggregate demand or supply that cause fluctuations in real GDP around its potential level. This theory emphasizes the role of rational expectations and market clearing.

The _______ Cycle Theory States That Only Unexpected Fluctuations in Aggregate