The level of income is unchanged in response to anticipated anti-inflation policy in ________.
A)real business cycle theory
B)traditional Keynesian theory
C)new Keynesian theory
D)post classical theory

Question

Quizplus · Accepted Answer

Real Business Cycle Theory posits that real economic variables, not monetary ones, drive business cycles, implying that anticipated anti-inflation policy, which is a monetary policy, would not change the level of income.

The Level of Income Is Unchanged in Response to Anticipated