The new classical model has as its central idea that
A) wage and price stickiness explain fluctuations in real GDP.
B) workers and firms have rational expectations.
C) the Federal Reserve should adopt a monetary growth rule.
D) shifts in aggregate demand have no impact on real GDP.
Answer: B
Economics
You might also like to view...
A basis for the slope of the short-run Phillips curve is that when unemployment is high there are
a. downward pressures on prices and wages. b. downward pressures on prices and upward pressures on wages. c. upward pressures on prices and downward pressures on wages. d. upward pressures on prices and wages.
Economics
Suppose that if your income is $20,000, your tax is $4,000, but if your income is $40,000, your tax is $8,000. Such a tax is
A. Proportional. B. Progressive. C. A merit tax. D. Regressive.
Economics