Figure 27-4

-In the new classical model in Figure 27-4, the initial impact of an anticipated increase in aggregate demand that is less than expected ________.
A)increases output from Yn to Y₂, and the inflation rate from P₁ to P₂
B)decreases output from Yn to Y₅, and increases the inflation rate from P₁ to P₅
C)decreases output from Yn to Y₄, and increases the inflation rate from P₁ to P₄
D)does not change output and increases the inflation rate from P₁ to P₃

Question

Figure 27-4
 
-In the new classical model in Figure 27-4, the initial impact of an anticipated increase in aggregate demand that is less than expected ________.
A)increases output from Yn to Y₂, and the inflation rate from P₁ to P₂ 
B)decreases output from Yn to Y₅, and increases the inflation rate from P₁ to P₅ 
C)decreases output from Yn to Y₄, and increases the inflation rate from P₁ to P₄ 
D)does not change output and increases the inflation rate from P₁ to P₃

Quizplus · Accepted Answer

The Answer of Figure 27-4
 
-In the new classical model in Figure 27-4, the initial impact of an anticipated increase in aggregate demand that is less than expected ________.
A)increases output from Yn to Y₂, and the inflation rate from P₁ to P₂ 
B)decreases output from Yn to Y₅, and increases the inflation rate from P₁ to P₅ 
C)decreases output from Yn to Y₄, and increases the inflation rate from P₁ to P₄ 
D)does not change output and increases the inflation rate from P₁ to P₃

Figure 27-4 -In the New Classical Model in Figure 27-4, the Initial