Which of the Following Is TRUE Regarding the New Classical

question 275

Multiple Choice

Which of the following is TRUE regarding the new classical view of the business cycle?

• A) Long- term contracts cause the money wage rate to be sticky.
• B) If firms and workers anticipate an increase in aggregate demand, money wages can be adjusted.
• C) If firms and workers expect the quantity of money to increase, aggregate demand will decrease.
• D) Long- term contracts cause business cycles.

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Definitions:

Revenues

The total income generated from normal business operations and includes discounts and deductions for returned merchandise.

Incremental Cash Flow

The additional cash flow generated by a company from a new project or investment, used for analysis of its viability.

Capital Budgeting Analysis

A process that involves evaluating and comparing the financial impacts of long-term investments to choose the most profitable ones.

Macro-Incremental

This term is not widely recognized as a standard financial or economic term. NO.