Why C is correct. Could you please explain meaning of question and how it is not affected. -------------- According to new classical economists, financing a reduction in current taxes by government borrowing will most likely result in aggregate demand being: A. decreased. B. increased. C. unaffected. D. increased or reduced, depending on interest rate levels.
classical economist believe shifts in AS and AD are due to technology changes over time. The situation described in the question is what a keynesian economist would believe.
new classical say that people anticipate what will happen in the future in this case if govt will cut taxes and borrow more new classical say that people will save anticipating an increase in tax in the future
florinpop, anywhere in schweser I can find info about differences in new classical and classical economist? I only find info on classical economist… whats the difference?