According to the new classical system,an unanticipated increase in the money stock
A)will shift the aggregate supply schedule only.
B)will shift the aggregate demand schedule only.
C)will shift both the aggregate demand and aggregate supply schedules.
D)None of the above

Question

Quizplus · Accepted Answer

An unanticipated increase in the money stock leads to a shift in the aggregate demand schedule only, according to the new classical system. This is because it temporarily increases spending before prices adjust, affecting the demand side of the economy without directly influencing the supply side in the short term.

According to the New Classical System,an Unanticipated Increase in the Money