Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession? a) government focuses more on recession and cyclical unemployment b) price and wage stickiness is reasonable in the short run c) upward trend of potential GDP determines the rate of inflation d) standard of living is ultimately determined by long-term growth

Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession? a) government focuses more on recession and cyclical unemployment b) price and wage stickiness is reasonable in the short run c) upward trend of potential GDP determines the rate of inflation d) standard of living is ultimately determined by long-term growth

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter26: The Neoclassical Perspective

Section: Chapter Questions

Problem 15RQ: When the economy is experiencing a recession, why would a neoclassical economist be unlikely to...

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When the economy is experiencing a recession, why would a neoclassical economist be unlikely to argue for aggressive policy to stimulate aggregate demand and return the economy to full employment? Explain your answer.
According to neoclassical theory, compensating consumers for inflation as measured by a base year weighted index can overcompensate them because: A some goods may be inferior B relative prices may not have changed C some goods may give disutility D goods are substitutable in consumer preferences
According to neoclassical economists, a graph of aggregate supply in long run appears: A) Upward sloping B) Horizontal C) Vertical D) Downward sloping
According to a neoclassical perspective, in the long run, a surge in aggregate demand will most likely result in A) A rise in the level of output. B) An increase in the aggregate price level. C) A decline in the level of output D) Downward pressure on the price level.
Neoclassical economics does NOT argue _______ Question 1 options: GDP is determined by supply factors such as resources and technology, not aggregate demand government regulation is generally good for the overall economy the market system has the self-adjusting mechanism that fixes unemployment and recession in the long run as long as wages, prices, and interest rates are flexible raising minimum wage generally creates unemployment
A key difference between neoclassical and Keynesian economists is how to predict and treat the future growth of the economy. Neoclassicalists believe the focus should be on ____________ and Keynesians believe the focus should be on _________________. A, B, C, OR D ONE ANSWER A short-term problems; long-term problems B long-term problems; short-term problems C long-term problems; long-term problems D short-term problems; short-term problems
In the neoclassical Supply and Demand model, what is meant by shortage? Group of answer choices Making a bet that the value of a stock will go down. At the existing price, the quantity demanded exceeds the quantity supplied. At the existing price, quantity supplied exceeds the quantity demanded. A decrease in quantity demanded.
Neoclassical economics does not provide an adequate conceptual framework for the analysis and understanding of economic change and the dynamics of the global economy. Why? In recent years which theory challenges the fundamental assumptions of the neoclassical theory? What is counter-arguments? Explain and discuss.
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 spending
What policies will a Neoclassical Economist tell the government to enact in order to foster a healthy economy? a) The government should increase production output through regulating sales of resources and strictly monitor exports and imports. b) The government should implement the COLA to improve the economy c) The government should set up and regulate wages and unions, and set price floors and ceilings for specific fundamental goods. d) The government should keep inflation low and maintain low tax levels over the long run.
From a neoclassical view, which of the following is less important? fighting unemployment encouraging long-term growth encouraging more productivity per worker level of potential GDP
Imagine that the AD curve intersects the AS curve in the Neoclassical Region and that the price of oil increases dramatically. What happens to the level of GDP? Group of answer choices (A) It goes down. (B) It stays the same. (C) It goes up.