ame Date: Class: Indicate the answer choice that best completes the statement or

Question

ame Date: Class: Indicate the answer choice that best completes the statement or answers the question. classical theory are based? a. New Keynesian economics assumes that the economy can reach equilibrium below the nswer choice tha -1 . which o f the following statements accurately expresses the assumptions on which ne theory are basedly expresses the assumptions on which new Keynesian and new natural rate of unemployment, whereas new classical economics assumes that b. New Keynesian economics maintains that government intervention is unnecessary, c. New Keynesian economics assumes that the long-run Phillips curve is vertical, d. New Keynesian economics assumes that all prices are flexible, whereas new classical economics applies e. New Keynesian economics emphasizes short-run reductions in inflation rates, whereas new classical macroeconomic equilibrium is always at the natural rate of unemployment whereas classical economics supports an active government role. whereas new classical economics views the long-run Phillips curve as horizontal. a fixed-price model. economics focuses on short-run reductions in the unemployment rate 2. Which of the following schools of thought stressed on a fixed-price model for macroeconomic equilibrium? a. Traditional Keynesians b. New Keynesians c. Monetarists d. Classical economists e. New classical economists 3. believe that a government that takes an active role in the economy may do more harm than good because economic policy operates with a long and variable lag. a. Traditional Keynesians b. Keynesians c. Monetarists d. Classical economists e. New classical economists 4. Monetarists think that the government a. should take an active role in the economy. b. should change the money supply growth rate regularly to achieve low inflation. c. should actively intervene in the economy, but only by decreasing the fiscal expenditure. d. should intervene in the economy as little as possible. e. should consciously set out to achieve full employment. Cogyight Cengage Learning Powered by Cognera. Page 1

Explanation / Answer

(1) The correct answer is option (A)

(2) The correct answer is option (B)

(3) The correct answer is option (B)

(4) The correct answer is option (B)

(10) The correct answer is option (E)

(11) The correct answer is option (A)

(12) The correct answer is option (D)

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