By itself, an increase in aggregate demand increases GDP by the least amount in the
A) Keynesian theory.
B) monetarist theory.
C) new Keynesian theory.
D) real business cycle theory.

Question

Quizplus · Accepted Answer

In the real business cycle theory, increases in aggregate demand are seen as having a minimal impact on GDP because the theory emphasizes productivity shocks and technological changes as the main drivers of economic fluctuations, rather than changes in demand.

By Itself, an Increase in Aggregate Demand Increases GDP by the Least