New classical economists believe that the classical model
a. with the rational expectations assumption added provides a role for activist stabilization policies.
b. is a poor starting point to construct new macroeconomic models.
c. with the rational expectations assumption substituted for the perfect information assumption provides a starting point for constructing useful macroeconomic models.
d. is equivalent to the monetarist model.
e. both c and d.
B
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Assume foreign beer is a normal good. If the incomes of demanders increase,
A) demand for foreign beer will increase. B) the quantity supplied of foreign beer will increase. C) the price of foreign beer will increase. D) all of the above will occur. E) none of the above will occur.
For the period 1947-2012, the behavior of the U.S. money supply is best characterized as
A) nearly constant over time. B) somewhat smoother than GDP. C) somewhat more volatile than GDP. D) extremely volatile and unstable.