Which of the Following Accurately Describes the New Classical View

question 84

Multiple Choice

Which of the following accurately describes the new classical view of stabilization policy?

• A)Changes in monetary policy do not affect output in the short run.
• B)Policy changes which are unexpected are likely to introduce substantial uncertainty in household and business decisionmaking, causing output to become more volatile.
• C)There's no need for stabilization policy since the economy operates at its full-employment level in the short run.
• D)Rational expectations negates any effect of stabilization policy.

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Definitions:

Social Rules

Unwritten guidelines that dictate the behavior expected of individuals within a society or group.

Culture

The shared patterns of behaviors, practices, beliefs, values, and artefacts that members of a society use to cope with their world and with one another.

Incestuous Relations

Sexual relationships between closely related individuals, which are often prohibited by law and social norms due to genetic and ethical concerns.

Children Under 18

Individuals who are legally recognized as minors and have not yet reached the age of majority, which is typically 18 years in many countries.