What All "New Classical" Models Have in Common Is the Assumption

question 64

Multiple Choice

What all "New Classical" models have in common is the assumption of

• A)imperfect information.
• B)continuous clearing of product and labor markets.
• C)the primary importance of technological and supply shocks in causing business cycles.
• D)downward nominal wage rigidity.
• E)countercyclical real wages.

---

Definitions:

Aggregate Demand

Cumulative interest in goods and services within an economic structure, evaluated at a particular comprehensive price level over a specific duration.

Short Run

A timeframe in which a company has at least one input that remains constant and is unable to be altered.

Short-Run Equilibrium

A state in economics where demand equals supply, resulting in market stability over a temporary period.

Long-Run Aggregate-Supply Curve

Illustrates the total production of goods and services in an economy at different price levels when input prices fully adjust to changes in the price level.