In the Current Debate Over Economic Policy,the New Classical Macroeconomists

question 64

Multiple Choice

In the current debate over economic policy,the new classical macroeconomists argue that

• A) the economy is at a full-employment equilibrium when money demand equals aggregate demand.
• B) fiscal policy is effective in stabilizing the economy.
• C) prices are upwardly flexible.
• D) economic instability results primarily from the spending behavior of the private sector.
• E) discretionary monetary and fiscal policies are ineffective in eliminating recessionary and inflationary gaps and may even promote instability.

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