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- In what way is neoclassical economics different from old and new institutional economics? Which school of thought is founded on principles that are closer to reality?Do neoclassical economists tend to focus more on long term economic growth or on recessions? Explain briefly.What is the Keynesian and Neoclassical models.
- What is the Neoclassical Economics view of labor markets. How do they function? Does the economy produce full employment? How? If not, why?Which of the following is consistent with the neoclassical theory of the labour? Question 27 options: Workers are compensated according to their contribution to the social value of society. Workers earn a wage equal to the value they contribute to the economy. Wages are determined entirely by market supply. Wages are determined entirely by market demand.One practical limitation of the Classical or Neoclassical model is that it suggests allowing the economy to self-correct in the long run, but recessions may last a very long time. How severe is this problem and why? What is one example?