Shocks to long-run aggregate supply can be a source of business fluctuations ________.
A) only in real business cycle models
B) only in new Keynesian models
C) in both real business cycle and new Keynesian models
D) only if the money supply rises
Question 2
In the new Keynesian model, an ________ increase in productivity will impact ________.
A) unanticipated; both aggregate demand and aggregate supply
B) anticipated; both aggregate demand and aggregate supply
C) anticipated; aggregate demand, but not aggregate supply
D) unanticipated; aggregate demand, but not aggregate supply
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