Which of the following is the basic tenet of new classical ...

[tingc95]

Which of the following is the basic tenet of new classical economics?
 a. A change in the fiscal policy affects the equilibrium level of real GDP but has no impact on the equilibrium price level.
  b. A government-induced shift in aggregate demand affects the real GDP only if they are expected by the economic agents.
  c. A change in aggregate demand affects the aggregate price level only if the aggregate supply curve is perfectly elastic.
  d. A change in monetary policy affects the equilibrium level of real GDP only if those changes are unexpected.
  e. An expected change in a monetary or fiscal policy leads to a proportional shift of the long run supply curve.

Question 2

The longer the time period considered, the elasticity of supply tends to:
 a. decrease.
 b. remain constant.
  c. increase.
 d. converge to zero.

[fdliggud]

Answer to Question 1

d

Answer to Question 2

c

[tingc95]

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