Which of the Following Statements Is (Are)correct? the New Classical

question 29

Multiple Choice

Which of the following statements is (are) correct? The new classical economics

• A)questions the soundness of the Keynesian model,arguing that many of its relationships are not firmly based on individual optimizing behavior.
• B)criticizes what it considers arbitrary assumptions of Keynesians concerning wage stickiness and consequent involuntary unemployment.
• C)favors the rational expectations assumptions over formulations that assume that individuals form price expectations on the basis of past history of prices because the rational expectations hypothesis is consistent with individual optimizing behavior.
• D)All of the above
• E)None of the above

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Definitions:

Premium On Bonds Payable

The amount by which the bond's selling price exceeds its face value, representing additional cost to the issuer.

Loss On Bond Retirement

A financial loss that occurs when a bond is redeemed before its maturity date and the redemption value exceeds its carrying value.

Interest Payable

A liability account showing the amount of interest expense that has been incurred but not yet paid as of the balance sheet date.

Effective Interest Method

A technique used in accounting to allocate interest expense or income over the life of a financial instrument at a constant interest rate.