If the Economy Diverges from Its Full-Employment Output, New Classical

question 135

Multiple Choice

If the economy diverges from its full-employment output, new classical economics would suggest that

• A)a change in the velocity of money would be all that is needed to return it to its full-employment output.
• B)an improvement in insider-outsider relationships is all that is needed to return it to its full-employment output.
• C)an efficiency wage in the economy would return it to its full-employment output.
• D)internal mechanisms within the economy would automatically return it to its full-employment output.

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Definitions:

Brain-Wave Activity

The patterns of neuronal electrical oscillations in the brain, which are measured by electroencephalography (EEG) and associated with different states of consciousness.

Emotionality

A trait referring to the intensity and complexity of emotions and emotional responses.

Respiration

The biological process involving the inhalation of oxygen and the exhalation of carbon dioxide, essential for sustaining life and cellular function.

Galvanic Skin Responses

Physiological reaction that measures the electrical resistance of the skin, which changes with emotional states.