Both the new classical and new Keynesian models had in common the belief that
A) in the medium run, output returns to its natural level.
B) output is always at its natural level.
C) in the short run, output would likely deviate from its natural level.
D) none of the above
A
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Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?
A) no impact at all B) The level of unemployment would decrease so the production possibilities frontier would shift outward. C) The nation would move to a new position on its production possibilities frontier but the frontier itself would not shift. D) The production possibilities frontier would shift inward. E) The number of young workers would increase so the production possibilities frontier would shift outward.
A change in price that has relatively little effect on quantity demanded is called elastic demand
Indicate whether the statement is true or false