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 18CTQ
Explain why the neoclassical economists believe that the government does not need to do much about
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Why would neoclassical economists think that the government doesn't need to
take many steps to combat unemployment? Whether you concur or disagree
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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
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?
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
- Why would an economist choose either the neoclassical perspective or the Keynesian perspective, but not both?arrow_forwardWhat is the Keynesian and Neoclassical models.arrow_forwardNeoclassical 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.arrow_forward
- According to neoclassical labor supply model, one reason why women have lower labor force participation than men is gender wage gap, the fact that their time in labor markets is less valued than men. True Falsearrow_forwardDefine the neoclassical economic theory. List and explain it's main assumptions.arrow_forwardExplain why classical assumptions are not realistic?arrow_forward
- What portions of Keynesian economic theory have the most merits?arrow_forwardDo neoclassical economists tend to focus more on long term economic growth or on recessions? Explain briefly.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_forward
- Discuss what the long-run Phillips curve looks like in the neoclassical perspective, and why the trade-off between inflation and unemployment disappears. From this perspective, what is the best government policy response to favorable economic conditions in the long run?arrow_forwardExplain what is meant by ‘macroeconomics’ and why some economists think that it is different to standard neoclassical economics. explain with graphs please.arrow_forwardBriefly discuss the aggregate supply curve in the neoclassical model, including how the curve is drawn, what it determines, and how it operates over timearrow_forward
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