An Important Feature of the New Classical Model Is That

question 20

Multiple Choice

An important feature of the new classical model is that an expansionary policy,such as an increase in the rate of money growth,can lead to a decline in aggregate output if the

• A)public expects an even more expansionary policy than the one that is actually implemented.
• B)policy comes as a surprise.
• C)public expects a less expansionary policy than the one that is actually implemented.
• D)policy is anticipated.

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Definitions:

Abductive Reasoning

A form of logical reasoning that starts with an observation or set of observations then seeks to find the simplest and most likely explanation.

Deduction

The process of reasoning from general principles to specific cases, or the subtraction of expenses from income to determine taxable income.

Induction

The process of introducing a new employee to their job and the organization, involving training and information sessions.

Analogy

Examining and contrasting two objects, typically to explain or shed light on them.