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.