In the view of the new classical economists,an increase in the money stock will affect real output and employment only if the increase in the money stock

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According to new classical economists, only unanticipated increases in the money stock can affect real output and employment through changes in interest rates and the resulting decisions of firms and households. If the increase is anticipated, it will already be reflected in market prices and have no effect on real variables. Choices A and B are not directly related to the effect of an increase in the money stock on real output and employment.

In the View of the New Classical Economists,an Increase in the Money