The classical model differs from the Keynesian model in that
a. monetary policy does not impact output in the Keynesian model.
b. the classical model focuses on the long-run and the Keynesian model focuses on the short-run.
c. fiscal policy is more powerful in the classical model than in the Keynesian model.
d. the classical model believes monetary policy is a powerful impact on output and fiscal policy is not.
e. None of the above
B
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Explain what is meant when it is said that the demand for labor is a derived demand.
What will be an ideal response?
In making labor supply decisions, households weigh
A. the market wage against the value of their marginal product of labor. B. child care costs. C. the market wage against the value of market produced goods. D. the market wage against the value of leisure and time spent in unpaid household production.
Most cartels cease to be effective because:
A. consumers discover the cartel and buy from other firms instead. B. the dominant firm buys out the other firms. C. of the incentive to cheat on the cartel agreement. D. of strict enforcement of antitrust legislation.
Including discouraged workers in the calculation of the unemployment rate would
A) not change the reported rate. B) increase the reported rate. C) change the reported rate, but in an unpredictable manner. D) lower the reported rate.