Figure 28-9
-Refer to Figure 28-9. A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979, would result in a movement from C to A.

Question

Figure 28-9 
-Refer to Figure 28-9. A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979, would result in a movement from C to A.

Quizplus · Accepted Answer

A follower of the new classical macroeconomics would argue that contractionary monetary policy, like that pursued by Paul Volcker in 1979, would lead to a decrease in inflation expectations and a movement from point C to point A on the Phillips curve, reflecting lower inflation and potentially higher unemployment in the short run.

Figure 28-9 -Refer to Figure 28-9. a Follower of the New Classical