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; Keynesian cycle theory
C) an expansion; new classical cycle theory
D) an expansion; real business cycle theory

Question

Quizplus · Accepted Answer

An increase in aggregate demand typically leads to an expansion in the business cycle, which aligns with the new classical cycle theory that emphasizes the role of demand in economic fluctuations.

A Larger Than Expected Increase in Aggregate Demand Will Lead