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What does neoclassical theory say about income distribution and inequality
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- What does neoclassical theory say about income distribution and inequality. What are the causes and or cures for this problem?according to neoclassical theory, what determines wages and the return to capital? How would a Marxist or Institutionalist take issue with such a description of income distribution?What is neoclassical theory? Please use your own words
- Explain how the income from production is distributed to labor and capital according to the neoclassical theory of distribution.If the production conditions in the United States and Japan were to become essentially the same, would the neoclassical model suggest that trade between the two countries would cease? Why or why not? Illustrate your answer with a graph.Which one of the following is the best example of someone acting according to the assumptions of the traditional neoclassical model? -Dori studies hard for her test so she can eventually land a great job. -Alenia buys groceries for her sick neighbor out of kindness. -Marc buys a pack of cigarettes out of habit. -Chip buys an exercise machine based on a TV ad, even though research has shown that the machine is ineffective.
- 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?In a neoclassical model, describe how each of the following developments or measures will impact unemployment:• a rise in income levels for consumers throughout the economy• cheaper imported products• a fall in government spendingWhat does potential GDP mean and what does it mean in terms of neoclassical analysis? Please be sure to utilise examples.