One Assumption of the New Classical Model Is That

question 55

Multiple Choice

One assumption of the new classical model is that

• A) money wage rates are rigid.
• B) prices are "sticky" upward.
• C) people make rational expectations about aggregate demand.
• D) markets are not purely competitive.

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Definitions:

Industry Output Expands

An increase in the total production of goods and services by companies within a particular sector of the economy.

Resource Prices

The costs associated with acquiring inputs needed for production, including raw materials, labor, and capital.

Decline

A decrease in the quantity, quality, or level of something over time.

Constant-Cost Industry

An industry in which the cost of production does not change as the industry's output changes.