Which of the following statements is correct?
a. In the new classical view, the money wage is assumed to adjust quickly to clear the labor market whereas in the Keynesian view, the money wage is sticky in a downward direction.
b. In the new classical view, the money wage is sticky in a downward direction whereas the money wage is assumed to adjust quickly to clear the labor market in the Keynesian view.
c. In both the new classical and the Keynesian views, the money wage is assumed to adjust quickly to clear the labor market.
d. In both the new classical and the Keynesian views, the money wage is sticky in a downward direction.
A
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Some firms practice odd pricing because
A) it is a way to price discriminate. B) it is too difficult for sellers to reeducate buyers into accepting even prices. C) it lowers transactions costs. D) they believe that customers will buy a larger quantity with an odd price.
In comparison to a government that runs a balanced budget, when the government runs a budget deficit
A) business investment will fall. B) the equilibrium interest rate will fall. C) household savings will fall. D) none of the above
Normative economics:
A. is the focus of most modern economic reasoning. B. answers the question "What ought to be?" C. predicts the consequences of alternative actions. D. answers the question "What is?"