In the new classical model, the aggregate supply schedule depends on
a. the expected level of the money stock.
b. the expected price level.
c. the expected values of fiscal policy variables and other possible determinants of aggregate demand.
d. Both a and c
e. All of the above
Question 2
The supply-siders argue that investment is
a. primarily a function of current income.
b. highly responsive to changes in after-tax real interest rates.
c. primarily a function of expectations.
d. both a and b.
