Both new Keynesian and new classical cycle theories claim that
A)animal spirits can trigger a business cycle.
B)shifts in the SAS curve are the main impulse for a business cycle.
C)unexpected changes in aggregate demand trigger a business cycle.
D)expected changes in the quantity of money can trigger a business cycle.
E)a change in the price of oil is the major cause of a business cycle.

Question

Quizplus · Accepted Answer

Both new Keynesian and new classical cycle theories agree that unexpected changes in aggregate demand, such as changes in consumer or investment spending, can trigger a business cycle. They differ, however, in their views on the effectiveness of government intervention to stabilize the economy during these cycles.

Both New Keynesian and New Classical Cycle Theories Claim That