Describe the differences between classical and Keynesian economists in terms of their views about monetary neutrality
What will be an ideal response?
Keynesians believe that monetary neutrality holds in the long run but not in the short run. Classical economists are more accepting of the view that money is neutral even in the relatively short run.
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The trough of a business cycle occurs when ________ hits its lowest point
A) inflation B) the money supply C) aggregate economic activity D) the unemployment rate
Which of the following are the elements generally found in an inflation gap?
a. producing beyond normal capacity; high unemployment, high wages; low prices b. producing beyond normal capacity; low unemployment, high wages; high prices c. producing below normal capacity; high unemployment, high wages; high prices d. producing below normal capacity; low unemployment, low wages; high prices