The theory of new keynesian inflation dynamics

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The theory of new Keynesian inflation dynamics suggests that a fall in aggregate demand would

A. immediately reduce the price? level, followed by a more sluggish decline in real GDP.

B. immediately raise the price? level, followed by a more sluggish decline in real GDP.

C. immediately reduce real? GDP, followed by a more sluggish decline in the price level.

D. immediately raise real? GDP, followed by a more sluggish increase in the price level.

Reference no: EM13982376

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