In New Classical Economics, the Change in Output Caused by a "Price-Level

question 98

Multiple Choice

In new classical economics, the change in output caused by a "price-level surprise"

• A) is shown as a shift of the long-run aggregate supply curve.
• B) does not alter the rate of unemployment, even in the short run.
• C) is soon reversed through a shift of the short-run aggregate supply curve.
• D) permanently changes the rate of unemployment.

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Definitions:

Utilization Rate

The percentage of capacity or capability that is being used effectively at a given time.

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events happen with a known constant rate and independently of the time since the last event.

Service Rate

The speed at which a service provider can complete work or deliver services, often measured in customers served per unit of time or tasks completed per day.

Arrival Rate

The frequency at which entities (such as customers, materials, or information) reach a system or service point, often measured in entities per time unit.