-In the new classical model in the figure above, an unanticipated contractionary monetary policy ________.
A) shifts the economy from point 1 to point 2 to point 3
B) shifts the economy from point 1 to point 4 to point 3
C) shifts the economy from point 1 to point 3
D) shifts the economy from point 3 to point 4 to point 1

Question

-In the new classical model in the figure above, an unanticipated contractionary monetary policy ________.
A) shifts the economy from point 1 to point 2 to point 3 
B) shifts the economy from point 1 to point 4 to point 3 
C) shifts the economy from point 1 to point 3 
D) shifts the economy from point 3 to point 4 to point 1

Quizplus · Accepted Answer

The Answer of 
-In the new classical model in the figure above, an unanticipated contractionary monetary policy ________.
A) shifts the economy from point 1 to point 2 to point 3 
B) shifts the economy from point 1 to point 4 to point 3 
C) shifts the economy from point 1 to point 3 
D) shifts the economy from point 3 to point 4 to point 1

-In the New Classical Model in the Figure Above, an Unanticipated