In the New Classical Model, ________

question 4

Multiple Choice

In the new classical model, ________.

• A) all wages and prices are perfectly flexible with respect to expected changes in the price level
• B) a fall in the expected price level results in an immediate and equal rise in wages and prices
• C) only unanticipated policy can affect aggregate output and unemployment
• D) A and C only

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Definitions:

Plant-rich Swamp

An ecosystem characterized by saturated ground and abundant plant life, often found in low-lying areas.

Sedimentary Rock

Rock formed by the accumulation or deposition of mineral and organic particles at the Earth's surface, followed by compaction and cementation.

Iron Formation

A rock composed of millimeter- to centimeter-thick layers of iron-bearing minerals, especially iron oxide, commonly with quartz.

Gypsum Formation

A geological process leading to the creation of gypsum, a mineral used in building materials and fertilizers, through the evaporation of mineral-rich water.