According to New Classical Economists Who Adhere to the Policy

question 6

Multiple Choice

According to new classical economists who adhere to the policy irrelevance proposition,

• A)monetary policy can effectively reduce the rate of unemployment in the short run.
• B)workers are not rational in the long run.
• C)the Phillips curve actually slopes upward,not downward as traditionally assumed.
• D)expansionary monetary policy will only lead to a higher rate of inflation in the long run.

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Definitions:

Budget Lines

A visual depiction showing every possible pair of two products that can be bought within a specific budget at constant prices.

Indifference Curve Analysis

A graphical representation used in microeconomics to show combinations of two goods that provide the consumer with equal levels of satisfaction or utility.

Numerically Measurable

Refers to data or quantities that can be quantified and expressed in numerical terms, facilitating analysis and comparison.

Utility Analysis

An economic technique for measuring the satisfaction or benefit derived by consumers from consuming goods and services.