If the economy is initially at equilibrium and an unexpected decline in aggregate demand takes place, in the short run aggregate output will
A) fall in the new classical view, but not in the new Keynesian view.
B) fall in the new Keynesian view, but not in the new classical view.
C) fall in both the new Keynesian and new classical views.
D) remain at full employment in both the new classical and new Keynesian views.
C
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A problem with the neoclassical growth theory is its
A) prediction that population growth lowers the real wage rate. B) inability to explain persistent differences between countries' GDP growth rates. C) prediction that population growth raises the real wage rate. D) comparison of the economy to a perpetual motion machine.
Credit cards do not fulfill the three functions of money
Indicate whether the statement is true or false
A farmer grows wheat and sells it to a bakery for $5 . The bakery uses the wheat to bake bread and sells it to a distributor for $20 . The distributor sells the bread to a supermarket for $30, which then sells the bread to customers for $50 . Which of the following is true? a. The value added by the distributor is $30
b. The value added by the supermarket is more than that added by the bakery. c. GDP rises by $50 plus the value added at each stage of production. d. Counting the value added at each stage instead of counting the final selling price creates a problem of double counting. e. The value added by the farmer is $20 because the wheat, which is worth $5, is necessary for each of the three remaining stages of production.
Economists report changes in unemployment in:
A. percentage points, not percentages. B. percentages, not percentage points. C. percentage points or percentages, interchangeably. D. nominal figures; they rarely use percentages or percentage point changes.