A larger than expected increase in aggregate demand will lead to ________ in the ________ of the business cycle.
A) a recession; new Keynesian cycle theory
B) a recession; new classical cycle theory
C) an expansion; new classical cycle theory
D) an expansion; real business cycle theory

Question

Quizplus · Accepted Answer

A larger than expected increase in aggregate demand typically leads to an expansion in the economy, which aligns with the new classical cycle theory that emphasizes the role of demand shocks in influencing economic fluctuations.

A Larger Than Expected Increase in Aggregate Demand Will Lead