The difference between new classical theory and new Keynesian theory is that
A) in new classical theory wages are assumed to be flexible, and in new Keynesian theory wages are assumed to be somewhat inflexible.
B) in new classical theory wages are assumed to be somewhat inflexible, and in new Keynesian theory wages are assumed to be flexible.
C) adaptive expectations is the dominant expectations theory in new classical theory, and rational expectations is the dominant expectations theory in new Keynesian theory.
D) in new Keynesian theory the short-run aggregate supply curve is vertical, and in new classical theory the short-run aggregate supply curve is upward sloping.
A
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Policies taken to move the economy closer to potential output
A) must necessarily be contractionary policies. B) are lagging policies or automatic policies. C) are called stabilization policies. D) must necessarily be expansionary policies.
What is the difference between microeconomics and macroeconomics?
What will be an ideal response?
Assumptions for economic theories and models should be
A) rejected if they are not totally realistic. B) logical rather than empirically testable. C) simple and reasonable rather than complex. D) maintained until overwhelming evidence to the contrary occurs.
In reference to worldwide competition laws, each of the following are fundamentally prohibited or highly suspicious among regulators across almost all countries except which one?
A) creation of cartels B) charging unfairly high prices C) dominant firms D) monopolies