The business cycle impulse in the new classical theory of the business cycle is
A) unexpected changes in aggregate demand.
B) expected changes in aggregate demand.
C) fluctuations in money growth with rigid wages.
D) fluctuations in investment coupled with rigid wages.

Question

Quizplus · Accepted Answer

The new classical theory of the business cycle emphasizes that unexpected changes in aggregate demand, often due to changes in monetary policy, are the primary impulses driving business cycles.

The Business Cycle Impulse in the New Classical Theory of the Business