Both the New Classical and New Keynesian Business Cycle Theories

question 103

Multiple Choice

Both the new classical and new Keynesian business cycle theories agree that

• A) expected changes in aggregate demand lead to the business cycle.
• B) unexpected changes in aggregate demand cannot result in a business cycle.
• C) the money wage rate is influenced by rational expectations of the price level.
• D) the long-term nature of wage contracts allow expected changes in the price level to cause business cycles.

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Definitions:

Disparate Treatment

A form of discrimination in which an individual is treated differently based on prohibited factors such as race, age, sex, religion, or national origin.

Discrimination

Unfair treatment of a person or group based on characteristics such as race, gender, age, or sex, rather than individual merit.

Legal Situations

Circumstances or cases that involve or are subject to laws, legal processes, or legal interpretations.

Disparate Impact

A phenomenon where a policy or practice appears neutral but disproportionately affects individuals of a certain group, often used in discussions of employment discrimination.