According to the New Classical Macroeconomists,the Only Government Policy Changes

question 21

Multiple Choice

According to the new classical macroeconomists,the only government policy changes that can have a substantial impact on output or employment are those that

• A) are announced well in advance.
• B) involve large budget deficits.
• C) are discretionary, rather than adhering to a rule.
• D) are unanticipated by businesses and households.
• E) are designed to control wages and prices.

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Definitions:

Positive Contrast

The phenomenon where the perceived quality or response to a stimulus increases when it is contrasted with a less preferable stimulus.

Negative Contrast

The phenomenon where an organism shows a reduced response to a less favorable or smaller reward after experiencing a more favorable or larger reward.

Fixed-Interval Schedule

A type of reinforcement schedule where the first response is rewarded only after a specified amount of time has elapsed.

Variable-Interval Schedule

A reinforcement schedule in operant conditioning where a response is rewarded after an unpredictable amount of time has passed, creating a variable pattern of reinforcement.