The Key Difference Between the New Classical Theory of the Business

question 21

Multiple Choice

The key difference between the new classical theory of the business cycle and the new Keynesian theory of the business cycle is that the new classical theory believes that ________ while the new Keynesian theory believes that ________.

• A)only unexpected changes in aggregate demand will change real GDP; only expected changes in aggregate demand will change real GDP
• B)only unexpected changes in aggregate demand will change real GDP; both expected and unexpected changes in aggregate demand will change real GDP
• C)expected changes in aggregate demand will change real GDP; expected changes in aggregate demand will not change real GDP
• D)the short- run aggregate supply curve is horizontal; the short- run aggregate supply curve is vertical

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Definitions:

Mission Statements

Formal summaries of the aims and values of a company, organization, or individual, guiding their goals and strategic decisions.

Standards

Established norms or requirements designed to ensure products, services, and processes meet specific criteria for quality and performance.

Objectives

Specific, measurable goals set by an individual or organization in pursuit of their larger aims or missions.

Organization's Performance

A measure of how well an organization achieves its set objectives and goals through efficient and effective use of resources.