In the New Classical Model,________

question 45

Multiple Choice

In the new classical model,________.

• A) all wages and prices are perfectly flexible with respect to expected changes in the price level
• B) a fall in the expected price level results in an immediate and equal rise in wages and prices
• C) only unanticipated policy can affect aggregate output and unemployment
• D) Both A and C of the above

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Definitions:

Aversion Conditioning

A method of behavioral therapy that involves pairing an undesirable behavior with an unpleasant stimulus to reduce the frequency of the behavior.

Electric Shock

The sudden stimulation of nerves and muscles produced by an external electric current, potentially causing harm or discomfort.

Behavioral Contracting

A therapy technique involving the creation of a written agreement between two parties to reinforce or change specific behaviors.

Systematic Desensitization

A therapeutic technique used to reduce phobia or anxiety through gradual exposure to the feared object or situation combined with relaxation exercises.