The key difference between classical and Keynesian macroeconomists is their differing beliefs about
A) the slope of the aggregate demand curve.
B) the speed at which prices adjust.
C) the natural rate of unemployment.
D) the full-employment level of output.
B
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The figure above shows the market for college education. The efficient quantity of education is
A) 0 students. B) 4 million students. C) 6 million students. D) more than 6 million students. E) more than 4 million students and less than 6 million students.
"Monetary policy can be described either in terms of the money supply or in terms of the interest rate.". This statement amounts to the assertion that
a. rightward shifts of the money-supply curve cannot occur if the Federal Reserve decides to target an interest rate. b. the activities of the Federal Reserve's bond traders are irrelevant if the Federal Reserve decides to target an interest rate. c. changes in monetary policy aimed at expanding aggregate demand can be described either as increasing the money supply or as increasing the interest rate. d. our analysis of monetary policy is not fundamentally altered if the Federal Reserve decides to target an interest rate.
Suppose that the government implements expansionary fiscal policy that raises aggregate demand, but the policy is unanticipated. According to new classical theory, in the short run the price level would ____________ and Real GDP would ______________. In the long run, new classical theory would predict that the price level would ______________ compared to its original long-run equilibrium level
and that Real GDP would ____________. A) rise; decline; rise; remain unchanged B) rise; rise; rise; remain unchanged C) rise; decline; remain unchanged; rise D) fall; rise; remain unchanged; rise
Total revenue is equal to
A. Cost of production. B. The income from sales. C. Total revenue minus total cost. D. Profit.