If We Compare the Models of Lucas and Mankiw We

question 24

Multiple Choice

If we compare the models of Lucas and Mankiw we realize that

• A)Mankiw does not assume that people have rational expectations
• B)Lucas assumes firms are price setters while Mankiw assumes that firms are price takers
• C)Lucas assumes that prices are sticky because firms are reluctant to change them
• D)both models permit a demand-based explanation of the business cycle
• E)none of the above

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Definitions:

Corrosive

Describing a substance that has the ability to wear away or destroy other materials through a chemical reaction, often leading to damage or deterioration.

Microbial Processes

These are biological reactions and activities carried out by microorganisms, playing critical roles in recycling nutrients in the environment.

Volcano Emissions

The release of gases, ash, and molten rock from a volcano, which can significantly impact air quality, climate, and the health of nearby ecosystems and human populations.

Lightning

An electrostatic discharge during a thunderstorm that results in a bright flash of electricity traveling between clouds or between a cloud and the ground.