New classical economics suggests that in the long-run, changes in aggregate demand will cause
A) only short-run changes in output and employment.
B) long-run changes in output and employment.
C) only short-run changes in the price level.
D) no change in output and employment.

Question

Quizplus · Accepted Answer

In the long run, according to new classical economics, changes in aggregate demand will not affect output and employment because the economy will adjust to its natural rate of output.

New Classical Economics Suggests That in the Long-Run, Changes in Aggregate