Figure 17-9
-Refer to Figure 17-9.A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979,would result in a movement from C to A.

Question

Figure 17-9 
-Refer to Figure 17-9.A follower of the new classical macroeconomics would argue that ________ like that pursued by Paul Volcker in 1979,would result in a movement from C to A.

Quizplus · Accepted Answer

A follower of the new classical macroeconomics would argue that contractionary monetary policy, like that pursued by Paul Volcker in 1979, would result in a movement from point C to point A. This is because contractionary monetary policy is designed to decrease the growth rate of the money supply, which conversely increases interest rates, reduces spending, and reduces inflationary pressure.

Figure 17-9 -Refer to Figure 17-9.A Follower of the New Classical Macroeconomics