According to the new classical economics,predictable changes in aggregate demand
A)affect the level of real output.
B)will not affect the level of real output.
C)may or may not affect the level of real output.
D)None of the above

Question

Quizplus · Accepted Answer

New classical economics states that changes in aggregate demand will not affect the level of real output as prices and wages adjust freely and quickly to maintain equilibrium in the economy. Therefore, the level of real output remains unaffected by predictable changes in aggregate demand.

According to the New Classical Economics,predictable Changes in Aggregate Demand