Discuss new classical economics and real business cycle theory
What will be an ideal response?
New classical economics refers to that area of research where it is assumed that there is sufficient wage and price flexibility. It was a fairly logical extension of Lucas' work on rational expectations. Real business cycle theory attempts to explain fluctuations in output as changes in the natural level of output.
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Which geographic coincidence affected gasoline prices the most during 2005?
A. A tsunami hit the one area in the world most responsible for producing U.S. gasoline, Indonesia. B. Two major hurricanes affected the refining intensive areas of New Orleans and Houston. C. An earthquake happened to hit the energy-sensitive areas in and around Iran. D. There were tornado related electrical outages in the industrial Midwest.
The short-run aggregate supply curve is: a. upward-sloping
b. downward-sloping. c. horizontal. d. vertical.
Income distribution in the United States has become more equal since 1980
Indicate whether the statement is true or false
A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $3,500 . When it produces 101 units of output, its total costs are $3,750 . What is the marginal cost of producing the 101st unit of output?
a. $250 b. $275 c. $340.91 d. $350