Dynamic aggregate demand and aggregate supply model

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Which of the following is not a correct comparison between an expansionary monetary policy in the basic aggregate demand and aggregate supply model and in the dynamic aggregate demand and aggregate supply model? A. In the dynamic model, expansionary policy would be used when demand does not grow sufficiently; in the basic model, expansionary policy would be used when demand falls. B.If the economy is below full employment, expansionary monetary policy will cause an increase in the price level in both models. C.The dynamic model assumes that potential GDP is constantly growing while the basic model assumes that it is static. D. All of the above are correct statements about the two models. E. None of the above are correct statements about the two models.

Reference no: EM131112268

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