Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 26, Problem 15RQ
When the economy is experiencing a recession, why would a neoclassical economist be unlikely to argue for aggressive policy to stimulate aggregate
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Does neoclassical economics focus on the long term or the short term? Explain your answer.
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C) A decline in the level of output
D) Downward pressure on the price level.
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
Chapter 26 Solutions
Principles of Economics 2e
Ch. 26 - Do rational expectations tend to look back at past...Ch. 26 - Legislation proposes that the government should...Ch. 26 - Would it make sense to argue that rational...Ch. 26 - Summarize the Keynesian and Neoclassical models.Ch. 26 - Does neoclassical economics focus on the long term...Ch. 26 - Does neoclassical economics view prices and wages...Ch. 26 - What shape is the long-nm aggregate supply curve?...Ch. 26 - What is the difference between rational...Ch. 26 - A neoclassical economist and a Keynesian economist...Ch. 26 - Do neoclassical economists tend to focus more on...
Ch. 26 - Do neoclassical economists tend to focus more on...Ch. 26 - Do neoclassical economists see a value in...Ch. 26 - If aggregate supply is vertical, what role does...Ch. 26 - What is the shape of the neoclassical long-run...Ch. 26 - When the economy is experiencing a recession, why...Ch. 26 - If the economy is suffering through a rampant...Ch. 26 - If most people have rational expectations, how...Ch. 26 - Explain why the neoclassical economists believe...Ch. 26 - Economists from all theoretical persuasions...Ch. 26 - Is it a logical contradiction to be a neoclassical...Ch. 26 - Use Table 26.3 to answer the following questions....
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Similar questions
- If a neoclassical model shows increasing wages growing faster than productivity in the economy over the long run, what else will likely occur? inflationary increase in price level substantial short-term off-setting decrease in output change in government policy to decrease in aggregate demand short-run decrease in cyclical unemploymentarrow_forwardIn neoclassical economics, if there is unemployment, it means that:arrow_forwardIn 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.arrow_forward
- A neoclassical economist and a Keynesian economist are studying the economy of Vineland. It appears that Vineland is beginning to experience a mild recession with a decrease in aggregate demand. Which of these two economists would likely advocate that the government of Vineland take active measures to reverse this decline in aggregate demand? Why?arrow_forwardAggregate Supply: Explain whether the economy is currently operating in the Keynesian, intermediate or neoclassical portion of the economy's aggregate curve. Also, point out a time when the economy may have been operating at another portion of the aggregate supply curve.arrow_forwardSuppose that an economy wants to boost available labor hours in order to increase aggregate supply. What is the best way to accomplish this?arrow_forward
- Which of the following schools of economic thought modelled the economy as a physical system that was quickly brought back to equilibrium by the actions of rational economic agents? Keynesians O The Catastrophists The Neoclassicals O The Austriansarrow_forwardA 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 problemsarrow_forwardAccording to neoclassical economists, a graph of aggregate supply in long run appears: A) Upward sloping B) Horizontal C) Vertical D) Downward slopingarrow_forward
- In the Teenaged Neoclassical Model (akin to Ramey's neoclassical framework), government purchases (G) are presumed to be intrincally useless; one example might be military spending in a country without foreign enemies. In the TNM, when government purchases rise, what happens to GDP (Y) and to subjective well-being (U)? Y rises, U falls. Y falls, U falls. Y rises, U rises. Y falls, U rises.arrow_forwardAccording 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 preferencesarrow_forwardIn the Neoclassical Model, which of the following is more likely to be associated with a high level of unemployment? A) A low money wage. B) A low real wage. C) A high rate of interest. D) A high rate of inflation. E) None of the above.arrow_forward
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