The New Classical Model Has as Its Central Idea That

question 183

Multiple Choice

The new classical model has as its central idea that

• A)wage and price stickiness explain fluctuations in real GDP.
• B)workers and firms have rational expectations.
• C)the Federal Reserve should adopt a monetary growth rule.
• D)shifts in aggregate demand have no impact on real GDP.

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Definitions:

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends, indicating how much profit is reinvested.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.

Total Assets

The sum of all assets owned by a company, including cash, inventory, property, and equipment.