Which theory distinguishes between expected and unexpected fluctuations in aggregate demand and asserts that only unexpected changes can affect real GDP?
A)Keynesian cycle theory
B)Monetarist cycle theory
C)New classical cycle theory
D)Real business cycle theory

Question

Quizplus · Accepted Answer

The New Classical cycle theory posits that only unexpected changes in aggregate demand can affect real GDP, as people adjust their expectations and behaviors based on anticipated changes.

Which Theory Distinguishes Between Expected and Unexpected Fluctuations in Aggregate